1/The next bull run has begun. Bitcoin has sprung from the 3Ks to 15K. The long awaited “institutions” are here building massive positions and beginning to publicly share their Bitcoin investment theses.
2/Despite the bear market opportunity and relative ease of self-custody many hold Bitcoin on exchanges and services. As the price 2X, 5X and 10Xs from here, newly minted Bitcoiners will find their bitcoins trapped.
3/Although generous with purchase limits, most Bitcoin exchanges have varying degrees of withdrawal limits. Limits are ostensibly to curb hacked account losses & monitor fraudulent transactions.
4/Exchanges have had more than their fair share of issues and controversy, creating opportunities for innovative, Bitcoin friendly retail-focused competitors such as Square’s CashApp
5/CashApp adoption has accelerated. Exponential user growth led to $1.6B of Bitcoin revenue in Q3 2020. However, those who have adopted CashApp will find their hard earned Bitcoin trapped on the service.
6/CashApp has $5k/week withdrawal limit.
If you purchased a bitcoin a few months ago at $5K, it would have taken you a week to move it off the service.
One bitcoin at $20K will take 4 weeks.
One bitcoin at $100K will take 20 weeks.
7/Mobility is the domain of the rich and found on exchanges. Individuals with “pro” or “vip” status can move many more bitcoins. Eg, Coinbase Pro has $25,000/day limit. Still, a bitcoin at $100k will take 4 days. Kraken’s top tier has effectively no limit.
8/Denominating withdrawals in USD and creating arbitrary limits that on a dollar for dollar basis are more restrictive than traditional banks is the antithesis of what Bitcoin stands for. Yet nearly all Bitcoin on-ramps throttle exits particularly impacting retail buyers.
9/Whether by choice or not, storing your bitcoins on an exchange subjects you to unnecessary risk of theft, account suspension and seizure. Self-custody ensures access and reduces the ability of exchanges to engage in fractional reserve.
Fin/Do not rely on centralized authorities who can and will determine when and how fast you can move your bitcoins. This control will rapidly become extraordinarily difficult to overcome when Bitcoin’s price begins to climb in earnest.
Not your keys, not your coins.
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0/The gold standard was abandoned in 1971 & absolute control over the money supply handed to central banks. Yet despite gold’s new ATH and long held popular narratives, it cannot function as an adequate check against fiat. Thread ⤵️
1/Humans organically sought ways to communicate value in local trade circles and settled on a form of money. When trade expanded it met other local forms of money. These were corrupted through counterfeiting (Rai stones, glass beads) or adopted if it was better (gold).
2/Good money breeds trust which can be leveraged for personal and political gain. Rules were established to codify the good money. Yet those rule makers - those in power - clipped coins, debased currencies and/or outright printed money for personal benefit.
0/Debt drives our world. It permeates every financial interaction, sits at the heart of an entire global economy. It feeds on itself, on us & consumes without producing. We sit at the apex of 100+ yrs of a grand experiment. Our debt construct is fracturing. What's next?
1/The Fed’s fix is a commitment to a tsunami of debt. It’s going to break its 2% inflation mandate and aim higher. And in order to do so money printing will reach epic levels to combat global devaluation and long term technology driven deflation.
0/Enjoyed talking to Brady on the recent @citizenbitcoin podcast. We covered a lot of ground and I'd like to expand on a few of the topics we touched on and add some final thoughts ⤵️
0/Two years ago I published “Hyperbitcoinization: Winner Takes All.” #Bitcoin's growth will continue unabated until it becomes a global standard. This thread reviews current macro trends supporting the thesis.
2/Though the spot price seems to have hardly changed, this last year has further confirmed Bitcoin’s resiliency. It has moved closer to the forefront of monetary policy discussion.
The Decade of Discontent, Destruction and Debt Deflation: 2020-2030
Next 10 yrs will be a telling & trying time. We’re entering the next phase of a crisis brewing since 2008. The root cause & solution lie in reforming & reversing the state’s role in money and markets.
A thread.
1/Recent dramatic financial & social events point to a grand crisis that will climax around 2030. The economy going forward will be a distorted version of itself growing/contracting in violent ways dislocating, disrupting and destroying traditional businesses.
2/Families will suffer and continue to struggle under the dark shadow of central bank policies which punish savers through inflation, wage stagnation and negative interest rates. The average working family will struggle with both implicit and explicit inflation. A familiar chart:
Over the last 11 years a debt fueled speculative economy with multiple asset bubbles has been primed for correction. Will this be remembered as the Great Crash of 2020? This cycle shares many characteristics with the 1920s and its 1929 crash. A mega thread ⤵️
1/October 29, 1929. The roaring 20’s come to an abrupt end. The Dow crashed beginning a long slide down that bottommed in 1932 after losing 90% of its value and did not recover its previous ATH until 1954.
2/It was an era of prosperity. Post WW1 America became an ascendant world power. Like today, industry and technological innovation boomed. The arts, music and urban life-style prospered. Taxes were low. Consumerism took center stage. Credit was easy.