Why Bitcoin Crashes Are Actually Wealth Building Opportunities and How to Think Clearly When Everyone Is Panicking (Bit Coin, Wealth & Investing)

So what does going to zero actually mean? And in traditional finance, a crash and zero mean different things, and people just mix the two terms together.

A crash is a massive drawdown in price.

For example, like in, uh, in Tesla in 2022, the, um, the price drew down 75%.

That was an amazing buying opportunity.

If you bought Tesla in 2022 when the price went down that much, you now see the price has gone up 100% since then or more, I think.

That is a massive crash in the price, when the price goes down massively.

Now, zero is different.

Uh, an asset going to zero or something going to zero is a total loss of confidence or backing.

That means there are no buyers whatsoever.

The company, for example, has gone completely insolvent and it just doesn't exist anymore.

It's totally gone to zero.

That's like when a currency hyperinflates like the Venezuelan bolivar or the Zimbabwean dollar, or a company goes bankrupt like Lehman Brothers or FTX, that corrupt crypto trading company that was run by Sam Bankman-Fried.

That totally went to zero.

It doesn't exist anymore, and it, it, it, is completely worthless to anyone.

It's a social collapse.

It's like complete end, totally over, and it's not just a financial event.

So when people say Bitcoin could go to zero, they're often using the wrong definition.

Now, I'm not trying to hide and pretend that Bitcoin doesn't go up and down because anyone knows that.

You can find that out in about 10 seconds.

But Bitcoin has crashed many, many times.

I'm not gonna try and pretend to you that investing in Bitcoin is gonna be a chilled, easy bike ride in the countryside.

It's not.

Holding an asset like Bitcoin is pretty volatile.

It goes up and down.

But what I can tell you is that Bitcoin's price has been crushed sort of 80% or 70%, sometimes 90% drawdown, but it always comes back.