Thread by @Breedlove22

1/22. In its latest #Bitcoin market cycle, which peaked in December 2017, many new entrants have been pummeled by its falling price. Many are asking: will it ever recover? Let's take a look at #Bitcoin in some varied contexts and explore...

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2. So, #Bitcoin's price "collapsed" from ~$20K. This market cycle is actually ordinary. Hardwired to be perpetually caught up in lately, us humans are all subject to becoming caught up in both FOMO and FUD. We lived through a mania, and we are now living through a winter:

3. Speaking of winter, did you know that Amazon once crashed 94% beginning in November 1999 (from $85 to $5) and has grown by 32,697% since (to $1,640)?

4. Amazon accomplished this historic feat by gaining control of the digital market for distribution networks. The space which Amazon conquered is driven by scarcity (finite distribution channels) and subject to winner-take-all dynamics (network effects and economies of scale).

5. Similarly, the market for money (at its base money foundation) is driven by scarcity and subject to winner-take-all dynamics (as a quick aside: this 3-part essay goes into depth on these and other relevant topics:
medium.com/@breedlove22/m… )

6. There will absolutely and only ever be 21,000,000 total #Bitcoin, each representing a self-sovereign stake in the digital market for money. Money is the most valuable network in the world at $100,000,000,000,000 ($100 Trillion, this figure is not a typo).

7. #Bitcoin is winning in this market because it leverages economic incentives to grow, functions as a discreet means of wealth storage and is absolutely beyond the reach of any one (when properly stored, this includes governments and banks).

8. For the first time in history, #Bitcoin enables individuals to establish true self-sovereignty that cannot be violated by inflation, supply manipulation or confiscation.

9. Once enough of the superrich realize that a (hedged) #Bitcoin position is the best way to protect their wealth from government interference there is going to be a stampede to enter the market; a global event becoming increasingly likely in the face of a rising populist wave.

10. Speaking of governments, did you know that ALL government paper money has, at best, trended towards worthlessness? The *best* performing government fiat money in history is the British Pound, which has *lost* 99.5% of its purchasing power.

11. When hyperinflation takes hold of a country, currencies collapse against the most liquid and predictably-supplied (hardest) assets first. #Bitcoin is both highly liquid and predictably-supplied, making it a prime candidate for wealth protection during hyperinflation events.

12. By making a #Bitcoin investment with soft government debt-money, you are trading an infinitely reproducible asset for one that is absolutely scarce. Before #Bticoin, only time itself was absolutely scarce.

13. Speaking of scarcity, it is the primary characteristic desired when it comes to wealth storage. Scarcity is the starting point of all economic value. Scarcity drives the value of money. This is why gold became a global standard and has been hoarded by wise men across time.

14. Gold became dominant precisely because it exhibited the highest hardness - meaning it was more difficult to produce units of gold over time than all other monetary technologies available in the world.

15. Simply, gold offered its users peace of mind as a means of wealth storage, making it the greatest monetary technology of its time. Its superior hardness (as quantified by the stock-to-flow ratio) catalyzed a game-theoretic convergence on a global gold standard:

16. Speaking of time, #Bitcoin becomes harder than gold approximately 13 months from now (May 2020). This inevitability is rooted in mathematical certainty within the most secure digital network in human history.

17. Monetary hardness is exactly what drives the value of wealth storage assets like gold and #Bitcoin, since people naturally seek ways to store wealth that cannot be debased (via inflation, confiscation or other means).

18. Here is #Bitcoin’s price history in relation to its hardness; as measured by the stock-to-flow ratio:

19. #Bitcoin is the fastest growing asset in human history and represents the biggest asymmetric investment opportunity in our lifetimes. Remember; we are still extremely early:

20. Despite its volatility and deeply misunderstood nature, #Bitcoin is growing relentlessly:

21. Its growth is driven by scarcity and human nature. #Bitcoin’s absolute growth waves are amplified each time its new supply flow is further constricted every four years (which increases its stock-to-flow ratio):

22. In light this history and the untenable, debt-ridden economic realities pervading the world today - I believe there is no better bet for the future than #Bitcoin.

Thanks to: @bquittem @real_vijay @danheld @saifedean @NickSzabo4 @naval @MartyBent @nic__carter @cburniske