The Myth of Millionaires and Bitcoin

I can’t tell you how many times I’ve heard somebody say bitcoin will boom because “if every millionaire tried to buy bitcoin, there aren’t even enough bitcoins for all of them.”

Obviously, this is a true statement. When you have 36 million millionaires and only 17 million bitcoins, not everybody can own one. As a result, a frenzied rush of millionaires bidding for bitcoin will send prices skyward. And then:

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Moon! Lambo! ATH!

Bitcoin’s price will go so high it will not make any sense, it will make the 2017 bitcoin-mania seem like a scalper marking up second-hand tickets to a Wiggles concert.

Who thinks up this crap?

He’s thinking what I’m thinking.

I understand the sentiment here, it’s a variation on the old “numbers game” cliche. If you started a composting company and a million people spent $1 on your fertilizer, you’d be a millionaire.

Come on. That’s not an investment thesis, that’s just a whole bunch of bullshit.

That’s like saying if every millionaire bought my book, I’d be an international best seller several times over—which is true, but you and I both know that isn’t going to happen, even if I keep my Readers’ Favorite 5-star rating.

Most millionaires don’t act like you think they do

I know millionaires. Not all 36 million of them, but enough to get a good sense of what they’re like.

During my time on Capitol Hill, I was surrounded by them. Working for H&R Block, I spent a lot of time with several. As a landlord, I know a few (one of whom I consider a mentor). When I tended bar, one of my jobs had me serving VIPs at fundraisers and important receptions.

Does this make me an expert on millionaires?

No, but I’m just a guy posting on the internet. I don’t need expertise. Here are my observations.

Most millionaires do not spend money on frivolous things

If you think millionaires spend their time buying outrageous jewelry and flashy cars, you’re watching too much YouTube. Get off your Instagram.

Some millionaires blow their money on that stuff, for sure. Most value their wealth more than that.

Read John Rampton’s excellent, short article 9 Everyday Habits of the Average Millionaire for a picture of millionaires that matches mine.

Of all the wealthy people I know, most spend far below their means. If they buy nice things—quality suits, luxury cars, expensive food, rare art—it’s because they appreciate quality and aesthetics. They want to enjoy nice things, not show them off.

Also, you’d be surprised how many millionaires are cheap. Did you hear the story about the well-known billionaire owner of an NFL team who haggled over a $300 veterinarian bill? I did—from the vet herself.

My point is, if you’re fussing over a vet visit or dining at 5-star restaurants, you’re not likely to piss away your cash on fake internet money.

Most millionaires are too old to care

Speaking of billionaire owners of NFL teams, most millionaires are old. According to Wikipedia, 61 years old, on average. They look more like these people:

These people don’t care about bitcoin.

Than these people:

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Millennial bitcoin millionaires. Courtesy of @cryptogeek.

How many 61-year-old rich people care about bitcoin?

Most millionaires are too rich and busy for bitcoin

A million dollars doesn’t go as far as it used to, but it’s still a lot of money and most millionaires have far more than that and enough cashflow to sustain their spending. In fact, many of them still work.

They’re comfortable, financially secure, and able to actively grow their wealth.

When you have enough money to do almost everything you want and still have enough energy to make more money, you’re not likely to care about whether you miss out on bitcoin. You prefer to spend your time and effort doing things that you like—e.g., running your business, spending time with friends and family, traveling, working, socializing, things like that.

Bitcoin is an afterthought. Maybe you throw a little money at it because your friend or grandchild told you to, but you’re not losing sleep about getting 1 bitcoin as opposed to .1 or .01 bitcoin. It’s just not a big deal anymore.

A family friend got 1 bitcoin as a gift from her son. She still doesn’t know what to do with it and doesn’t care. When you have a million dollars, a few thousand more doesn’t seem like lot of money.

What will make millionaires buy bitcoin?

Certainly, some will buy bitcoin just to buy it or because they like the feeling of having exactly 1 bitcoin. Maybe they’ll want to show it off.

Most will buy bitcoin only if it’s useful. Another 2017-esque four-month social media hype-fest followed by a massive bust won’t do that. If you want millionaires to pine for bitcoin, you need bitcoin to show consistent usage, development, and network growth.

Until then, don’t expect millionaires to obsess over bitcoin. Once bitcoin gets useful, they’ll come.

But then again, once bitcoin gets useful, will it be sexy enough for anybody to care how much you have?

Mark Helfman is a cryptocurrency commentator and author of Consensusland, a Readers’ Favorite 5-star book about a country that runs on cryptocurrency.