2021.15 - Stupid
TLDR:
Dogecoin is massively outperforming Bitcoin right now. What can this possibly mean?
The best response I’ve seen on the matter came from one of my clients:
“Dogecoin is unquestionably stupid. The vast majority of the population is also undeniably stupid. I applaud people for taking advantage of the popularity of stupid shit and making bank from it”
—Devin M.
The sad reality is that betting on human stupidity may be better short-term bet than betting on human ingenuity. Stupidity is winning today.
If you bet on Doge congratulations and book some profits.
THE STANCE
My personal opinion on where the ball might be heading.
Place your Bets
Whether most people can see it or not, Bitcoin is the next step in the evolution of money.
This upgrade changes how money is produced, controlled, distributed, stored and exchanged.
Because Bitcoin changes what we can DO with money, it requires us to update our understanding of what money actually IS —this isn’t easy to do.
As I research what’s happening with Bitcoin, Lightning and DLCs (Discreet Log Contracts) I need to stretch my brain to understand what’s going on and my mind is awed by the spectacle of the infrastructure of a better future being built in front of my eyes.
Doge on the other hand, is a cryptocurrency created (kind of) as a joke to combine two popular trends, the Doge meme and cryptocurrencies, the goal was to make it fast, fun and free from fees. It’s early years would see Doge garner a colorful history, in many ways emblematic of much of the crypto scene.
Its monetary policy is shit (unlimited supply), it has virtually no development, security or roadmap. So why does Elon Musk love it?
Because stupid shit is funny. There’s no arguing the facts.
Breaking news: the recent price surge has moved the developers to look at the code again. Yay.
How it’s going:
How it started:
Doge is a fun way to “tip someone”. Say some funny shit, I’ll send you some Dogecoin..
For the record, I’m not a Doge hater. It’s a relatively honest shitcoin, at least it’s not pretending to actually be useful or secure, as opposed to some…
Personally, I hate betting on human stupidity, even when it’s “the smart play”.
Not all bad
Perhaps Doge’s most redeeming and valuable quality to me is its role as a person filter.
When plebs celebrate their “sick gainz” with Dogecoin, I’m laughing right along with them. But when someone —especially someone who pretends to be an educator in the space— disingenuously treats Dogecoin as something other than a hilarious pump-and-dump engine, you can safely label that someone as a scammer. Few bigger or more disappointing than Raoul Pal:
He knows better, he’s just hoping you don’t. I hope you prove him wrong.
Contrast this with Willy Woo’s sober look at Doge:
Willy knows that —despite there being no good reason for it— Doge has managed to remain alive and periodically pumps and dumps. And for a shitcoin, that’s all you need.
LONG BITCOIN
Recent news that keeps me bullish on Bitcoin —"long / bullish" means you have the expectation something will rise in value.
Don’t Take My Word
Bitcoining Billionaires
Legendary fund manager Ray Dalio has been one of those puzzling cases for Bitcoiners. His extensive knowledge of long debt cycles and appreciation for gold would seem to make him a natural candidate for rabid Bitcoiner.
As of his latest writing on the topic, his attitude had shifted to “I have these concerns but I could be wrong.” He’s still not rabid, but he’s now recommending Bitcoin.
Welcome to the team Ray, we’re honored to have you. Some laser eyes would look great on your profile pic ;-)
Blockchain Gary
Cheers from the Bitcoin community as Gary Gensler, who actually understands Bitcoin —he taught the course Blockchain and Money at MIT— was confirmed as chairman of the SEC.
Mr. Gensler joins several other high-ranking members of the US Governments who are pro-Bitcoin.
CRYPTO WARS
crypto- | ˈˌkrɪpˌtoʊ | concealed; secret.
The monopoly over fiat money will not be given up without a fight.
Not a Nation-State Attack
The Xinjiang/Inner Mongolia provinces in China host a sizable number of crypto miners during the dry season (they move to Sichuan/Yunnan during the wet season) .
A recent accident in a coal-mine (either flood or gas explosion, it’s hard to tell) and the subsequent inspections post-accident have caused widespread power outages in the region.
The outages had a visible impact in Bitcoin’s hash rate —the measure of computing power dedicated to securing the network.
It seems 8 miners were rescued and 21 remained trapped. Best I can tell, rescue efforts remain underway.
Critics immediately jumped on this to make the point that an accident in a coal-based (dirty) plant had made a significant dent on Bitcoin’s hash rate, ergo Orange Coin Bad.
The point is a little more nuanced than that. Apparently the accident didn’t just shut down a plant, but the whole local grid
The most interesting takeaway for this incident is that this accident is a great model for what a national ban on Bitcoin mining would look like. Some miners go offline, and the temporary hash rate decrease results in slower blocks and higher fees (therefore higher miner profits).
This incident will cause a very steep hashrate drop. Will the network be attacked? Tune in next week…
CBOC: Hello Bitcoin
The first official positive mention of Bitcoin from China’s government came from a high-ranking official at its central bank:
Perhaps they heard Peter Thiel’s speech?
Bitcoin as a power tool in geopolitical chess is highly underrated and most definitely not priced in, stack accordingly.
PRICE DISCOVERY
This is the section where I talk about price with an updated weekly price chart. If this is your first time here, there’s a “how to interpret” guide below the chart.
We had a dip
You can’t understand Bitcoin’s price action if you don’t consider leverage.
When traders are over-leveraged that means that a lot of people are betting price will move in one direction and it’s very profitable for whales to dump some coins and make the price drop in order to trigger liquidations —which cause whales to scoop cheaper coins back up.
It seems over $4B were liquidated in this event. Ouch.
Still, Bitcoin remains “on the board” all systems seem nominal despite the drop in hash rate and outlook is still wildly bullish for the mid and long term as far as I can see.
Last week’s daily chart (on the left) is aging well so far. Bitcoin broke through the $60k resistance and promptly came back down to test supports.
The (more up to date) chart on the right shows how it’s common for Bitcoin to re-test supports after making all-time highs. On Feb 23rd the $50k support did not hold and Bitcoin proceeded to go lower and test the $43k support (which held).
On March 22 it tested and broke the $55k support going down to the $50k line. And now, this latest test broke the $55k support on a daily wick but the body of the candle has (so far) managed to hover above $55k.
I stand by my original assessment, I’d be surprised if we go lower than $50k again.
I don’t generally like making price predictions but I believe that we’ll close the month below $58,800 Why so specific? because Bitcoin has never printed 7 green monthly candles in a row and I don’t think that will change right now.
So stack hard, because starting next month we’re going to give Doge a run for it’s money ;-)
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