2021.21 - Hungover
TLDR:
Bitcoin’s fire-sale is being ignored by men nursing alt-season hangovers. Their lack of conviction will cause many to miss Bitcoin’s next big jump.
Don’t be one of them.
THE STANCE
My personal opinion on where the ball might be heading.
Perspective
Now that alt-season has come to its predictable end I see people who got swept by the mania licking their wounds.
A few were able to take some profits from their alts before the crash, many did not. Some risked more than they should and a few took serious losses.
Looking back, which of the two coins below would you rather have invested in?
As you may have suspected, they’re both actually Bitcoin —the only difference between them is that one shows price in a linear scale and the other in a log scale.
If your mindset is still based on the left chart you’re probably cursing the day you heard of Bitcoin.
If your mindset is based on the right chart you’re probably doing your best to buy the hell out of this pullback.
The case for Bitcoin is crystal clear once you can see it:
It’s obvious that not everyone can see it yet.
Your ability to understand what Bitcoin is, the problems it solves, the severity of said problems, the risks of owning it and particularly the risks of not owning it, will define whether you miss or make the most of the greatest transfer of wealth the world has ever seen.
If money is a topic of interest for you, there is no better investment you could make right now than putting in the work —and make no mistake, it takes work— to wrap your head around Bitcoin
The “formula” for investing in Bitcoin successfully has been neither complex nor secret: Buy and hodl BTC for at least 4 years.
BUT, the catch is that investing in Bitcoin requires serious conviction. You can be certain that there will be times —like these past few weeks— where the strength of your conviction will be put to the test.
This is not unique to Bitcoin by the way, as investing legend Stan Druckenmiller points out:
The second act of this bull market will begin when we least expect it and it’s likely to be spectacular as a participant and heartbreaking as a spectator.
If I were you I’d make sure to size my position to match my conviction and get in. Oh, and I’d stay away from alts this time. But that’s just me.
LONG BITCOIN
Recent news that keeps me bullish on Bitcoin —"long / bullish" means you have the expectation something will rise in value.
Indy 500
The Bitcoin car placed 8th in yesterday’s race. A solid beginning to what I hope will be an ongoing story.
MOAR Energy
There has been much discussion around Bitcoin’s energy consumption recently and there is a point that should never be lost: Bitcoin’s energy consumption is amply justified and a good thing.
The tweet above is a great bite-sized summary of why Bitcoin’s energy usage is good and justified, for a more nuanced understanding of the matter I’d point you to this excellent (20 min or so) Medium article
In Bitcoin, we have — for the first time in human history — a technology that directly financially incentivizes the discovery of cheaper ways to harness energy, one which cares not about geographic location, consumer demand, or other historical hindrances to energy generation.
— Bitcoin Mining and the Case for More Energy, Hodl’n Caulfield & Selene Lindstrom
Apple Enters the Chat
Apple incorporating Bitcoin into Apple pay would be a sensible “first date” for Bitcoin and Apple. There have been no announcements yet, but there is reason to believe it’s not just wishful thinking:
Billionaires Switching Sides
Over the past year a stream of legendary investors have started to publicly change their minds about Bitcoin. Some of these “conversions” have been expected for a while and are warmly welcomed
While Dalio has expressed misgivings in the past about governments banning Bitcoin, those who have studied his extensive work on debt have long expected him to eventually come around to Bitcoin. The wait is over.
Others billionaires have been received with less enthusiasm as their hot takes on Bitcoin and/or POW mining and “crypto” in general are, more often than not, uninformed.
One of the golden rules in Bitcoin is, if you’re going to complain about some aspect of Bitcoin, do your homework before. Those who don’t quickly find themselves on the receiving end of a swarm of cyber hornets.
Van Eck ETFs
It seems Van Eck will be going live this week with it’s Europe-based Bitcoin and Ethereum ETFs. Should be huge.
CRYPTO WARS
crypto- | ˈˌkrɪpˌtoʊ | concealed; secret.
The monopoly over fiat money will not be given up without a fight.
Saylor Under Fire
Michael Saylor brokered a meeting between some miners and Elon Musk and —not entirely without reason— Bitcoin Twitter lost its collective mind.
Let me make my position clear: Any incarnation of a “Ministry of Mining” would be bad.
Not because transparency of information around energy consumption is bad, but rather because it could put Bitcoin on a slippery slope that needlessly threatens its fungibility and censorship resistance “we only accept Green Bitcoins here”.
This would posit a threat to Bitcoin’s independence on par with regulatory capture and should be firmly, emphatically and vocally opposed.
I have no problem believing that Saylor was just trying to get ahead of the narrative in good faith. His advocacy has been tireless and his understanding of the nuances of Bitcoin is beyond dispute.
I’d much rather have a financial and intellectual heavyweight like Saylor act as diplomatic matador in the bullring of ESG virtue-signalers than having a mob of angry plebs screaming in cacophony.
Still, we must remain alert. Hostile interests will continue to try to capture Bitcoin and it’s up to each of us to not permit this to happen.
Money With Feet
Jurisdictional arbitrage is going to be huge in Bitcoin. We already see the different battle lines being drawn as different states adopt postures around Bitcoin, attracting or repelling investments in the process.
Having said that, you can be certain about one thing. Federal regulation IS coming to Bitcoin:
I hope that the current cohort of Bitcoin-savvy regulators will produce regulation that fuels rather than hinders Bitcoin’s progress.
Cryptogenocide
This as perhaps the funniest thing I saw all week.
Pack it up guys, it turns out Bitcoin is a weapon of mass destruction.
Breaking Taleb
After a rather public fallout with prominent Bitcoiner Saifedean Ammous, Taleb has been showing frequent episodes of fragility, culminating in the announcement that he’ll be a speaker at a Bitcoin SV conference. There’s no coming back from this.
If you are lucky enough to not know what Bitcoin SV is, I’ll summarize by saying it’s one of the worst forks of Bitcoin and is backed by Craig Wright aka “Faketoshi” a lawsuit-happy clown who is financially backed by a gambling magnate and apparent low-life Calvin Ayre.
The fact that Taleb is willing to share a stage with these people speaks to a monumental lack of judgement.
SHORT FIAT
Recent news that makes me bearish on the legacy financial system —"short / bearish" means betting it will go down in value.
RIP M1 / M2
The FED will no longer update their M1 and M2 charts. I wonder why? Perhaps we should have one last look at those charts:
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.
Underwater
Bitcoin is still trying to come up for air. We’ll see how long it takes it to find its way to the surface.
We’ve been in “surprising” territory for over two weeks now. I hope you’ve been making the most of it.
Strong hands are best built TOGETHER.
I work with families, groups and individuals, helping them develop the knowledge and confidence to invest in Bitcoin safely.
All it takes is a few conversations.
Schedule a call to see if one of my plans is a good fit for you.
