“I guess in kind of makes sense that borrowing in Bitcoin is kind of implicit bet on Bitcoin falling, and lending in Bitcoin is an implicit bet that Bitcoin will rise.”
Correct analysis but not shocking. These people know what Bitcoin is while most others don’t. Not surprised they would offer a shitcoin fraud with bitcoin on fiat rails to 60/40 investors.
Bitcoin could be a lot of things in the future - most of which is unpredictable. But right now, with a long-term mindset, there’s no denying it’s the best store of value in the world. I would encourage you to put aside your preconceived notions of Bitcoin and do a deeper dive. I would start in places like Argentina where holding dollars is illegal and people need a store of value that is both secure and non-confiscatory.
Two things can be true at once: the crypto industry is full of fraud, pump and dump schemes, and a plethora of false technological promises. And Bitcoin, while it gave birth to this industry through its open source coding, is unlike all other coins in all aspects - proof of work, decentralized, based on game theory, fully auditable, etc.
Thanks for reading! So this is kind of the difficulty in writing/debating about Bitcoin--you're always left with the feeling that you're punching at the air. If you argue that Bitcoin is a currency, someone comes out of the woodwork saying 'no, it's not!' If you argue that it's a security, someone will come out swinging saying that, no, it's a replacement for the whole dollar system. It's a difficult thing to discuss writ large simply because it's so difficult to find places where everyone shares a point of view from which the debate can begin.
With all that in mind, I would disagree about the store of value argument for the reasons I point out in the piece. For one, Bitcoin is massively volatile, lack of which is a key component of a store of value (otherwise why wouldn't people flock to the Lira instead of the dollar in times of distress?). And sure, the Lira is fiat, but the point about volatility stands. Argentina is of little economic concern worldwide, and if I were taking a side on the store of value argument, I'd be far more concerned about the stance China has taken against Bitcoin than I would be about Argentina's scuffle with the dollar.
While I appreciate your point about crypto being rife with fraud, I think it's difficult to divorce Bitcoin (and all of the illicit purposes the anonymity of the blockchain has facilitated/could facilitate) from that reputation. Bitcoin has been used for illicit purposes, often expressly so because of the perceived ability to obfuscate transactions (which is much more difficult to pull off in a regulated, AML-based system). But, generally speaking, if you're a Bitcoin maximalist, that obfuscation is kind of the point, and we arrive at the place where we just have to agree to disagree.
At the end of the day I struggle to see the utility brought about by crypto, broadly speaking. It soaks up a ton of energy, utilizes a double-entry ledger system (which is not novel no matter how you package it), and creates an environment where facilitating illicit transactions is far easier than in the traditional dollar system.
FWIW nothing in my comment is intended to be snarky or condescending in case it comes off that way. Just sharing my opinion, as are you. Thanks again for the comment and for taking the time out of your day to read my article. Cheers!
Thank you for the reply! I completely agree in that debating Bitcoin can be...exhausting. The Bitcoin community is toxic and hard to take serious. Your first paragraph is spot on.
I do think it’s hard to defend given its use historically. On the surface, it has few redeeming qualities and seems to be a strain our energy grid. Instead of typing long winded responses to which we go back and forth, I will point to its continued, multi-faceted adoption and various resources:
3-5 gigawatts mining capacity online in Texas that serves as a base load for the grid. Shuts off during peak times.
UAE’s recent investment in bitcoin mining
Larry Finks new perspective on it and the soon-to-be ETF offerings that satisfy institutional demand for exposure
Paul Tudor Jones, Bill Miller and Stanley Drunkenmiller’s case for it
Jason Lowery’s “Softwar” - Bitcoins use case for military and cybersecurity. Also, the theory how it will be the first non-violent force that induces change
Lyn Aldon’s “Broken Money” - how Bitcoin fixes our broken monetary system
New accounting laws make it more attractive to hold as corporate treasury
Bhutan, El Salvador and Africa’s continued adoption
Bitcoin’s continued resilience despite FTX and other crypto disasters, attempted bans from sovereigns and negative propaganda from mainstream media, IMF and WEF.
China couldn’t ban it and is back to mining it. The IMF is upset it can’t continue to impose impossible-to-payback loans on El Salvador like it does to every other developing nation. Developing nations are certainly watching.
I don’t think it’s all Bitcoin, only Bitcoin in the future. I just believe it will be relevant in multiple capacities.
great response. I'd take 5% target gains denominated in Bitcoin at ANY volatility over a similar yield in dollar terms at zero volatility.
Even at risk adjusted rates Bitcoin has outperformed and will continue to outperform most traditional asset classes.
Whatever you classify it as- money, commodity etc it doesn't matter. It will become the monetary standard due to its advantageous properties over fiat. And with Bitcoin as the monetary standard all financial instruments and derivatives eventually will be settled on the first layer of the hardest money known to man.
“I guess in kind of makes sense that borrowing in Bitcoin is kind of implicit bet on Bitcoin falling, and lending in Bitcoin is an implicit bet that Bitcoin will rise.”
Correct analysis but not shocking. These people know what Bitcoin is while most others don’t. Not surprised they would offer a shitcoin fraud with bitcoin on fiat rails to 60/40 investors.
Bitcoin could be a lot of things in the future - most of which is unpredictable. But right now, with a long-term mindset, there’s no denying it’s the best store of value in the world. I would encourage you to put aside your preconceived notions of Bitcoin and do a deeper dive. I would start in places like Argentina where holding dollars is illegal and people need a store of value that is both secure and non-confiscatory.
Two things can be true at once: the crypto industry is full of fraud, pump and dump schemes, and a plethora of false technological promises. And Bitcoin, while it gave birth to this industry through its open source coding, is unlike all other coins in all aspects - proof of work, decentralized, based on game theory, fully auditable, etc.
Thanks for reading! So this is kind of the difficulty in writing/debating about Bitcoin--you're always left with the feeling that you're punching at the air. If you argue that Bitcoin is a currency, someone comes out of the woodwork saying 'no, it's not!' If you argue that it's a security, someone will come out swinging saying that, no, it's a replacement for the whole dollar system. It's a difficult thing to discuss writ large simply because it's so difficult to find places where everyone shares a point of view from which the debate can begin.
With all that in mind, I would disagree about the store of value argument for the reasons I point out in the piece. For one, Bitcoin is massively volatile, lack of which is a key component of a store of value (otherwise why wouldn't people flock to the Lira instead of the dollar in times of distress?). And sure, the Lira is fiat, but the point about volatility stands. Argentina is of little economic concern worldwide, and if I were taking a side on the store of value argument, I'd be far more concerned about the stance China has taken against Bitcoin than I would be about Argentina's scuffle with the dollar.
While I appreciate your point about crypto being rife with fraud, I think it's difficult to divorce Bitcoin (and all of the illicit purposes the anonymity of the blockchain has facilitated/could facilitate) from that reputation. Bitcoin has been used for illicit purposes, often expressly so because of the perceived ability to obfuscate transactions (which is much more difficult to pull off in a regulated, AML-based system). But, generally speaking, if you're a Bitcoin maximalist, that obfuscation is kind of the point, and we arrive at the place where we just have to agree to disagree.
At the end of the day I struggle to see the utility brought about by crypto, broadly speaking. It soaks up a ton of energy, utilizes a double-entry ledger system (which is not novel no matter how you package it), and creates an environment where facilitating illicit transactions is far easier than in the traditional dollar system.
FWIW nothing in my comment is intended to be snarky or condescending in case it comes off that way. Just sharing my opinion, as are you. Thanks again for the comment and for taking the time out of your day to read my article. Cheers!
Thank you for the reply! I completely agree in that debating Bitcoin can be...exhausting. The Bitcoin community is toxic and hard to take serious. Your first paragraph is spot on.
I do think it’s hard to defend given its use historically. On the surface, it has few redeeming qualities and seems to be a strain our energy grid. Instead of typing long winded responses to which we go back and forth, I will point to its continued, multi-faceted adoption and various resources:
3-5 gigawatts mining capacity online in Texas that serves as a base load for the grid. Shuts off during peak times.
UAE’s recent investment in bitcoin mining
Larry Finks new perspective on it and the soon-to-be ETF offerings that satisfy institutional demand for exposure
Fidelity’s outlook
Custodia Bank’s FED denial report (97 pages, longest ever by 94 pages)
Paul Tudor Jones, Bill Miller and Stanley Drunkenmiller’s case for it
Jason Lowery’s “Softwar” - Bitcoins use case for military and cybersecurity. Also, the theory how it will be the first non-violent force that induces change
Lyn Aldon’s “Broken Money” - how Bitcoin fixes our broken monetary system
New accounting laws make it more attractive to hold as corporate treasury
Bhutan, El Salvador and Africa’s continued adoption
Bitcoin’s continued resilience despite FTX and other crypto disasters, attempted bans from sovereigns and negative propaganda from mainstream media, IMF and WEF.
China couldn’t ban it and is back to mining it. The IMF is upset it can’t continue to impose impossible-to-payback loans on El Salvador like it does to every other developing nation. Developing nations are certainly watching.
I don’t think it’s all Bitcoin, only Bitcoin in the future. I just believe it will be relevant in multiple capacities.
Thank you for the discussion!
great response. I'd take 5% target gains denominated in Bitcoin at ANY volatility over a similar yield in dollar terms at zero volatility.
Even at risk adjusted rates Bitcoin has outperformed and will continue to outperform most traditional asset classes.
Whatever you classify it as- money, commodity etc it doesn't matter. It will become the monetary standard due to its advantageous properties over fiat. And with Bitcoin as the monetary standard all financial instruments and derivatives eventually will be settled on the first layer of the hardest money known to man.