On Bitcoin And Crypto

Bull Thesis

• Anti gov
• rich will like it (esp ETH)
• obv good idea, digital programmable money
• smart contract, stocks, ownership, just overall better basis for financial system
• price never dropped below electricity cost of production, bitcoin stores the cost needed to generate it
• trump gov is pushing it

Bear Thesis

• govs should fear it. if crypto continues to succeed, they will
• govs have outlawed gold before, can outlaw btc and crypto
• just because the tech succeeds does not mean the database must as well? why not use eth but start from scratch? or more likely have a gov run and approved coin (digital euro) that implements smart contract capabilities. govs can enforce adoption. There is literally legislature in place to force adoption and acceptance of the digital euro which will have all the smart contracting capabilities people will ever need. there is no push on normies to adopt crypto.
• Most people are not anarchist. They do like living in a stable save country with a functional government. As long as the gov does not overstep its bounds too much, there will not be a sufficient anarchist movement to drive btc adoption.
• trump is pushing it, because it allows him to offload gov debt (that’s the main point of the genius act) This builds up unhealthy leverage
• BlackRock is pushing tokenization, but CEO is not bullish on ETH (recommends only as small fraction of portfolio)

Horror Thesis

• crypto mostly bought and held by young people
• now also some institutional investors joining in at low allocation
• most owners have little to no understanding of technical / economic side
• current young gen is fucked, capitalism does not work for them, they hate their lives and jobs, they don’t see a path of hard work getting them the lifes they want, will have to work hundreds of years to afford a home
• i see a strong correlation in people holding a lot of crypto and being unsatisfied with life
• bitcoin price is held up by people seeing this as only chance to get the life they want, but this is a house of cards. They all just want to sell once the price is high enough, see no utility except speculation
• ‘bitcoin stores the cost needed to generate it’, what? That’s an absurd statement. Let me provide another perspective: Bitcoin must never fall below the cost of production. Otherwise it becomes uneconomical to mine, network would collapse. Ofc this causes the cost of mining to be a hard resistance but if it is ever clipped (e.g. during a deep market downturn which has never occurred since btc inception) then bitcoin will just fall.
• Bitcoin can’t lower this cost on the software side as that would require a hard fork; people don’t accept forks of BTC, Bitcoin cash was better, it lost because it was a fork.

Ofc you can also tell a story about how people invest in BTC because of this, and have it still turn out to be the future of money. But I find that unlikely as I see the current price driver not being about future potential but merely young people hoping for a better life and institutional investors also wanting some share of the cake. Also the digital euro us a rather great idea. Good job europe.