Thread by @rektdiomedes

A Short Thread On Volatility And Conviction

So... are we entering a 'crypto winter' like 2018-2020?

Is @CryptoHayes right that the FED is gonna club our bags like a baby seal?

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Or are we just on a dip and on the way to a @zhusu supercycle?

I don't know, but there's some fascinating historical precedents we can look at from history...

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One of the macro analysists I find myself constantly referencing- both irl and on here- is @LukeGromen.

And there's an interesting fact he often references about Weimar Germany...

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...which is the fact that (as everyone would guess), had you bought gold at the start of Weimar Germany's inflation/hyperinflation era, you would have ended up with +infinity type roi % in German Marks.. and insanely rich compared to your fellow Germans... HOWEVER...

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...if you had BORROWED gold to long it at the start, you would have been liquidated and lost everything something like 6 times during that period...

Because every time the pols and bankers came out with hawkish rhetoric gold would (temporarily) plummet...

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Does this sound familiar?

If, as Luke says, bitcoin (and crypto) are the only remaining 'free markets' (not artificially engineered like stocks, gold, etc), then it makes sense crypto will see that same type of extreme volatility...

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So, while I'm no macro expert, perhaps we'll start seeing these big 30-70% drawdowns much more frequently... as the money printer becomes more and more the defining element of USD-denominated returns...

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https://twitter.com/noahseidman/status/1480048677406212098

The US government cannot fulfill obligations to Baby-Boomers (Social Security, Medicare) and cannot return to a manageable debt/gdp level without keeping real interest rates (delta between inflation and nominal rates) extremely negative for the next 5-10+ years...

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This should be extremely bullish for all assets IN USD TERMS... (vs debasement is another story, h/t @RaoulGMI ), and the only question is which assets do better than others...

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I absolutely think crypto is a superior form of financial plumbing and will keep growing at at least 50% per year for the next decade... maybe much more...

If you think the same, then the long-term outlook is very promising...

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@DTAPCAP made this same point in the tweet below (by 'Booming Economy' I believe he primarily means low unemployment, which should continue since we have an increasing deficit of young people):

https://twitter.com/DTAPCAP/status/1480047033432088579

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Again, I'm merely trying to learn from these gigabrain folks, and could be 100% wrong about all of this, but it seems to me that a) the most important thing is to survive, just like a Weimar-era gold owner, and b) life will be much easier if we make volatility our friend..

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...which should get easier as protocols like @dopex_io present more structured derivatives to the market (buying/selling vol, etc)...

+ continually accumulating via yield farming whether market is up or down...

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twitter.com/dopex_io

... and despite the volatility, it seems that good projects will continue providing great returns... as demonstrated by folks currently killing it like @blknoiz06, @BillyBobBaghold, @xcurveth, @satsdart, etc on $JEWEL, $DPX, $CRV, etc.

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Finally, I'm actually a massive, massive fan of Arthur Hayes' writings... and if you haven't read his latest article I referenced above, check it (and all his others!) out via his profile below:

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https://twitter.com/CryptoHayes/status/1479231849088303104

In conclusion, this thread is somewhat similar to one I did a couple days ago, but am just working through these questions in my mind, as they are all extremely nuanced...

Overall though an unironic WAGMI to you frens who read this as always. I appreciate you :)

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Also meant to include below thread from @FloodCapital:

(h/t my man @secondsetmaze!)

https://twitter.com/FloodCapital/status/1480258299643768835?s=20