On this momentous night in #Bitcoin history, I’ve see a number of people ask “how could this possibly not cause the price to go up?”

My theory: individual events don’t impact bitcoin’s price, at least, not really and not alone.

Bitcoin markets seem driven by big, structural narratives that create raison d’etre for new entrants to participate.

We’ve been in one of those since March 2020: money-printer-go-brrr-means-inevitable-inflation-means-institutions-get in here.
Within the context of those meta narratives, individual events that validate and amplify the narrative can impact price - both by drawing new people in on the strength of the evidence for the narrative as well as by arming bulls and traders who are inclined to go long.
The end of Q4/ beginning of Q12021 was all about these type of events - culminating with Tesla’s $1.5B buy.
But then something happened, and we started to head sideways and down.

Was it the endless barrage of FUD? Tether? China? Environment? Elon? China again?

I don’t really think so.
To the extent individual events did start downward action, they weren’t the force that shaped how far the fall took us.

@AlamedaTrabucco has explained this in about a dozen threads like this one:
But even beyond leverage, I think that something bigger was happening: the money printer go brrr meme - the meta narrative that set the context for the last year plus - was losing steam on a macro scale.
Because remember - money printer go brrr wasn’t just a bitcoin meme. It was a meme that explained and justified exorbitant valuations across the stock market, but especially in tech stocks and risk on bets.
The vaccine and re-opening changed everything.

Or, more specifically, it changed the markets belief in the Fed’s ability to keep monetary policy as it has been.
For the last few months, every time Powell has said they aren’t even thinking about raising rates, markets have basically said: we don’t believe you.

So markets started to reconsider some prices - particularly around the riskiest things in tech.
Instead of a money-printer-go-brrr/stocks only go up market, we started to be in a “who TF knows what happens next market.” This doesn’t tend to lend itself to pouring into risk assets/novel monetary systems. 🤣
And to the extent that macro folks DID have conviction they knew what was coming, their bet was inflation that forced Powell/Yellens hand to back off - which would mean rising interest rates and lower valuations for stocks (and BTC)
Now of course, there are plenty of macro folks who have bought into the narrative of BTC as inflation hedge and have continued to be bullish.

But on a macro scale, that take on BTC 1) competes with other idea of it like a risk on asset, and...
2) is a looooooong duration view. Ie I imagine there are a hell of a lot of people who have long term conviction that the programmatically hard capped supply asset is going to be a great fiat/inflation counterweight over time but will still trade like a risk on asset short term
So what you’ve got is a set up where there is a lot of macro context for CFOs and institutions to take a more “wait and see” approach - and certainly the endless chain of FUD doesn’t help here.
That means no momentum and narrative supporting news for the traders and bulls to make their levered bets on which raise the price and offer that confirmation bias of the institutional narrative.
Instead just a slow (to not so slow) drip of FUD without counter weighing institutional entrance event announcements, set in a larger liminal macro moment where everyone feels like we’re in an in between.
So we tread water, waiting for either a) the institutional narrative to reassert itself, perhaps with some new dimension, or b) a new bull market meta narrative to emerge to take its place that doesn’t rely on the same things.
So getting back to El Salvador, it’s not impossible that if this truly does start a cascade of similar events, that it forms the seed of (b) that new meta narrative.

But that’s a thing that’s going to take time to play out.
Frankly, I don’t care about El Salvador’s impact on price. I care about it’s significance in the history of Bitcoin, of the country of El Salvador, and in the nature of how economic power is apportioned globally.
And what’s more: what the fuck do I know about any of this? I’m not a trader, just an observer of as many patterns as I can get my head around, so make of this what you will.

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More from @nlw

8 Jun
Alright since no one else seems to have done it, here's the running thread of laser eyed #Bitcoin politicians from Central and South America 👇
He was joined by El Salvador's president of Congress
Read 13 tweets
4 Feb
This new crop of critics pointing to the history of technology to explain why #bitcoin will inevitably be disrupted by something newer have totally missed that the most powerful forces in social technologies are not product features, but *network effects*
“Hurrrr but MySpace and Facebook.”

Yeah, and it’s been 15+ years since Facebook won. It has 2,800,000,000 users. Do we really think that nothing technologically better has come along in 15 years?

No, it’s the network effects.
“But bitcoin isn’t a social technology!”

Money is first and FOREMOST a social technology. By definition money is irrelevant without networks of people to exchange it. We just happen to call these networks markets.
Read 5 tweets
31 Dec 20

Ah yes, New Year's Eve. A time to reflect, look forward, celebrate, and throwback Long Reads Sunday style with the BEST BITCOIN TWEETS OF 2020.

Strap TF in, it's time for a thread!

2) Let's start by going back to February.

Even before the full impact of COVID-19 kicked in, bitcoiners were thinking big about the epoch shifts we were in the midst of.

3) When the markets DID start to finally react, bitcoiners were quick off the draw to point out that, whatever the risk the virus posed, the economic threat was significantly predetermined by fragility borne of decades of decisions.

Read 58 tweets
14 Aug 20
Belarus is the most interesting story people aren't paying attention to:

-26 year dictator arrests popular YouTuber who plans to run for prez
-YouTuber's wife runs on promise to hold real elections 6 months later, gets huge support
-Dictator claims to win 80% of vote...

-Massive demonstrations begin, not just in the capital but in 20+ cities around the country
-Police are INCREDIBLY brutal. 6000+ arrested. Widespread reports of torture. Horrifying audio evidence of torture all over the internet.
-Some police shown renouncing dictator.

-Internet shut off for 4 days
-Only app even a little usable is Telegram, which says it activated "anti-censorship tools"
-The main TG channel coordinating efforts of ~2 million Belarusians was started as a music channel 5 years ago by a teenager and has 4 staff and no website
Read 4 tweets
10 Jul 20
Welcome to the Macro Media Index: The most important macro content for June 2020.

This was an INSANE month. Social unrest and market disconnect. The Hertz bankruptcy bet.

If you want to understand the macroeconomic story right now, this thread is for you.

Let's dive in! 🧵👇
2/ A quick note! If you’re more of the audio type, I did this best of macro content as a @BreakdownNLW podcast as well.

Check it out on @coindesk coindesk.com/inequality-soc…

Or subscribe and listen directly: nlwcrypto.libsyn.com/social-chaos-a…
3/ The month kicked off with the realization - a stunning one to many to be sure - that not only had the market come screaming back after March lows - it had done so with record vigor.
Read 36 tweets
20 May 20
As if #bitcoin didn't have so much else going for it right now, the absolute fucking *intrigue* of the living history of it is insane.
Read 4 tweets

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