0/ Thread about The Great Cybercoin Bear Market of 2018: …
1/ There are basically three narratives that I've been hearing about the cybercoin market: “new bull run”, “tulip bulb crash”, and “dotcom-style winter”. Plus there's a fourth perspective I'd like to throw in. …
2/ First up, the bulls. They say that the good times are about to come roaring back, in 2019. Their main narrative at this point is that the institutional/legacy-financial-system money is about to start flowing in. …
3/ There are a lot of data points in favor of this narrative! Fidelity (fidelity.com/viewpoints/act…), ICE/NYSE/Bakkt (barrons.com/articles/bitco…), Amun (theblockcrypto.com/2018/11/26/tra…), CBOE/CME (investopedia.com/news/bitcoin-f…), etc. etc. …
4/ Here are a couple of good examples of the bull narrative recently: Novogratz (bloomberg.com/news/articles/…) and ICE/NYSE (barrons.com/articles/bitco…). …
5/ Of course, these people are "talking their book" (which is financial-industry jargon for shilling their bags), and they may be vulnerable to wishful thinking, but they also could be right. …
6/ Next up, the “tulip bulb crash” narrative. This one comes in two forms, the dumb one and the smart one. …
7/ The dumb one is something like “Bitcoin/crypto doesn't make sense and can't work, and everyone who values it is just wrong, and it will go to zero tomorrow.”. This is obviously false, but it's what the most prominent naysayers (I won't name them) keep coming up with. …
8/ Crypto deserves better critics! If you find one please let me know. J.P. Koning is the only good crypto critic. And he's not just good, he's great! He is a fantastic thinker and writer and scholar. But I don't think he's written anything about the overall market trend. …
9/ Here's my suggested fourth narrative: “Okay, it works, and some people do value it, but it doesn't provide *enough* value to *enough* people to grow beyond a niche. It will live forever as an increasingly unimportant tool for enthusiasts, like End User FOSS and P2P.”…
10/ This is the one I'm afraid of! I contributed to the project of empowering everyone with Linux/FOSS and P2P for years — decades — as it faded from a dream to a joke. That could happen to Bitcoin/crypto, too, and it's our job to realise the potential this time. …
11/ Let's distinguish this very real threat from the stupid “tulip bulb crash” narrative by calling this one something else, like “failure to find product-market fit”. …
12/ Next up, the “dotcom-style winter” narrative. This one is popular with Tech Industry style investors rather than Finance Industry style investors. The best rendition of it is this one from Fred Wilson: …
13/ It predicts a prolonged period of at least several years of doom and gloom, suppressed valuations, companies and projects failing, and talented people exiting the industry. …
14/ Good examples of this genre are this great thread from Primitive Ventures's Dovey Wan: , and this blog post by Pomp: offthechain.substack.com/p/icos-and-cry…, and this in-depth article by Meltem: medium.com/coinshares/the…. …
15/ Okay, those are the three main narratives: will crypto behave like a financial asset on a bull run, like a speculative bubble that pops ("tulip bulb"), or like a young innovative industry in crisis ("dotcom winter")? (Bonus narrative: like FOSS for end users—a fading dream)…
16/ Now I'd like to throw in a dose of facts. I love @onchainfx for their quantitative, backward-looking, empirical approach. This thread explains how this is the _fourth_ time in Bitcoin's 10-year life that this pattern has played out: . …
17/ Here's a letter I wrote to a friend (who shall remain nameless since he later became an important player in the cybercoins industry) after the _first_ Bitcoin bubble popped in 2011: web.archive.org/web/2018120305… …
18/ And finally, here are two perspectives that are positive even under the assumption that cybercoin winter is here for the long term: Fred Wilson and Wences Casares's "how to invest": (Just as good of advice or even better advice now than ever.) …
19/ And Sarah Jamie Lewis's “actually interesting cryptocurrency things” about fundamental technological innovations that are currently happening: …
20/ Okay, that's it! Phewf. This is probably one of my longest twitter threads ever. Please let me know what you think! ៚
P.S. Oh, I forgot to link to this subthread about companies laying off substantial staff:
