Thread by @RaoulGMI

Hopefully this is useful for people who struggle with BTC's price action. To most is looks like a bubble because we are trained in mean-reversion (i.e. this time is not different) of linear-trend assets. 1/

A classic example would be the 1980 silver bubble that eventually reverted back to price trend.

But digital assets are EXPONENTIAL trends driven by network effects. These are powerful long-term secular shifts are very different in nature to linear trends. As investors, we really aren't experienced in this, in general. So we apply our old bubble framework and it doesn't work

This is why you'll see lots of experienced investors hop off the trend early and look for bearish outcomes. Its normal behaviour even in highly experienced investors.

But Exponential trends revert back to their exponential moving average, not price trend. This is crucial to understand. Because BTC is the network effect of money, it gets speculative and overshoots and corrects to 300 week EXPMA, before rising again.

BTC is currently nearly 600% above its 300 week EXPMA. It normally hits 1000% or more when all said and done, before correcting (and that's a long way from here considering the EXPMA is rising now too and will continue to do so).

People find it extremely hard to hold onto exponential trends because we are programmed to think it mean-reverts, but it doesn't. Upside price dislocations are the norm when network effects take hold and bring speculation with it (that fuels the bear markets)

But, the trend actually keeps rising...there is no reversion to a linear trend unless the digital asset fails to gain network effects (and many will fail to).

Digital assets are so damned unique in that the users and the owners of the asset are the same, so users get rewarded as owners of the network effects, making them super powerful network effect multipliers.

Everything in the digital asset space is driven by network effects and all those individual networks create a super network effect all the entire space.

DA's = $1.7tn right now. There is room for a 100x or 200x increase over the next 10 years (with big ups and owns on route).

I've written a whole piece on this for Real Vision Pro. The narratives on all sides are so far behind how fast things are moving and how many network effects are combining.

I've literally never seen anything like it...