Lesson 11: All Prices Fall Forever Relative To Bitcoin

Preview

In the previous lessons we reviewed Bitcoin as a store of value, and we compared a fiat system that endlessly debases our time and energy through inflationary printing of money with a Bitcoin monetary system that cannot be debased because it has a fixed supply. I imagine for many of us today, who have only ever known a fiat system, this in itself seems like a radical idea. Can you imagine what it would be like to save $1,000 of purchasing power today, and in 10 years time or even 100 years time, you would still have $1,000 of purchasing power? That’s far different than the 95% decrease in purchasing power that the US Dollar has seen from 1925-2025.

But the reality of a fixed supply monetary system, like Bitcoin, may actually be much better. In the next several lessons in the Rabbit Hole we will explore the seemingly prophetic and visionary thinking of Jeff Booth. Jeff’s perspective on Bitcoin is particularly powerful because he thinks in terms of first principles, and then articulates the logical conclusions of those principles in a very clear and compelling manner. Let’s dive in and let Jeff articulate one of his fundamental principles: the natural state of the free market is deflation.

The Natural State of the Free Market is Deflation

Key Takeaways

• The natural free-market state is deflation — innovation and competition drive prices down, not up. Better technology reduces costs, so in a healthy system, your purchasing power should increase every year even if you do nothing.
• People mistake rising asset prices (like housing) for “gains” — but homes aren’t going up; currencies are going down. Housing became a store of value only because fiat money is such a bad one.
• Bitcoin is repricing the world, not “going up” — when you price assets in Bitcoin instead of fiat, everything becomes cheaper over time. Bitcoin doesn’t care about currencies — it simply exposes their debasement.
• Bitcoin imposes free-market discipline — by being perfectly scarce and decentralized, Bitcoin forces governments and markets to operate honestly. Those who understand this shift early will benefit; those who cling to the fiat worldview will be harmed by the transition.

Additional Resources

• The Price of Tomorrow: Why Deflation is the Key to an Abundant Future
• Jeff Booth on Inflation, Bitcoin, and Why You’re Getting Poorer in a “Free” Market