A longer tweet than i am usually accustomed to…
#Bitcoin was born out of the Great Financial Crisis as a solution to the perceived failures of fiat & centralized systems.Bitcoin’s price is very volatile, so to gauge how well it is faring, we need to view the big picture: 🧵
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#Bitcoin was born out of the Great Financial Crisis as a solution to the perceived failures of fiat & centralized systems.Bitcoin’s price is very volatile, so to gauge how well it is faring, we need to view the big picture: 🧵
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Michigan consumer sentiment just came out at 50—The lowest score in 85 years.
Inflation is at a 40-year high—Even by new metrics that bias it to the downside.
Jobs, up from last year, are still lower than before the pandemic, and the stock markets are starting to roll over.
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Inflation is at a 40-year high—Even by new metrics that bias it to the downside.
Jobs, up from last year, are still lower than before the pandemic, and the stock markets are starting to roll over.
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"𝑰 𝒅𝒐𝒏'𝒕 𝒕𝒉𝒊𝒏𝒌 𝒕𝒉𝒆𝒓𝒆'𝒔 𝒃𝒆𝒆𝒏 𝒂𝒏𝒚 𝒈𝒓𝒆𝒂𝒕𝒆𝒓 𝒆𝒏𝒈𝒊𝒏𝒆 𝒐𝒇 𝒊𝒏𝒆𝒒𝒖𝒂𝒍𝒊𝒕𝒚 𝒕𝒉𝒂𝒏 𝒕𝒉𝒆 𝑭𝒆𝒅𝒆𝒓𝒂𝒍 𝑹𝒆𝒔𝒆𝒓𝒗𝒆 𝑩𝒂𝒏𝒌 𝒐𝒇 𝒕𝒉𝒆 𝑼𝒏𝒊𝒕𝒆𝒅 𝑺𝒕𝒂𝒕𝒆𝒔 𝒕𝒉𝒆 𝒍𝒂𝒔𝒕 11 𝒚𝒆𝒂𝒓𝒔."
- Stan Druckenmiller, August 23, 2021
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- Stan Druckenmiller, August 23, 2021
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The euphoria of $4Trillion printed stimulus wore off. Credit cards are maxing out and houses are unaffordable.
Stagflation may be inevitable as interest rates are already close to the floor and we appear to be entering a recession without monetary policy tools to escape it.
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Stagflation may be inevitable as interest rates are already close to the floor and we appear to be entering a recession without monetary policy tools to escape it.
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The overall health of the economy affects crypto investment.
Crypto markets are also highly sensitive to the flow of free capital, which is under pressure from the compounding effects of inflation and Fed tightening.
More vulnerable markets freeze up without easy capital.
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Crypto markets are also highly sensitive to the flow of free capital, which is under pressure from the compounding effects of inflation and Fed tightening.
More vulnerable markets freeze up without easy capital.
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All these factors weigh heavily on the price of a young and volatile asset like Bitcoin.
Although it was invented to be an economic hedge, it isn't fully trusted as one yet, nor have things gotten bad enough to abandon traditional options.
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Although it was invented to be an economic hedge, it isn't fully trusted as one yet, nor have things gotten bad enough to abandon traditional options.
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We were told "the economy has never been stronger" and that "inflation is transitory".
Both were untrue, yet leaders continue to act surprised while trying to convince us of new unbelievable claims.
The people have lost faith in our financial leadership.
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Both were untrue, yet leaders continue to act surprised while trying to convince us of new unbelievable claims.
The people have lost faith in our financial leadership.
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If this wasn’t bad enough, crypto prices are already in a market “winter”—with more bad news landing daily:
#Terra's implosion was a massive black eye for the crypto industry. Its founder Do Kwon is being compared to Bernie Madoff as the lawsuits close in on its $45B crash.
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#Terra's implosion was a massive black eye for the crypto industry. Its founder Do Kwon is being compared to Bernie Madoff as the lawsuits close in on its $45B crash.
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It's likely that some of the weaker crypto exchanges will fail from reckless exposure to Terra...perhaps as early as this week.
Industry experts believe Terra gives regulators the ammunition they needed to move on #stablecoins and by association, Bitcoin itself.
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Industry experts believe Terra gives regulators the ammunition they needed to move on #stablecoins and by association, Bitcoin itself.
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The #SEC, #WEF, #EU & #IMF have all been looking for an excuse to leverage power over crypto, as have some U.S. legislators.
#ESG has become the weapon of choice for many, attacking Bitcoin for the amount of energy it consumes ...often with outlandish exaggeration.
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#ESG has become the weapon of choice for many, attacking Bitcoin for the amount of energy it consumes ...often with outlandish exaggeration.
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The EU is considering, and New York has tried to outlaw #POW mining. Groups like Greenpeace (funded by Bitcoin rival $XRP), are particularly outspoken.
Some criticism may be sincere but much of it seems to be intentional misunderstanding of Bitcoin's consumption vs. value.
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Some criticism may be sincere but much of it seems to be intentional misunderstanding of Bitcoin's consumption vs. value.
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Bitcoin miners are ideally aligned to benefit from isolated clean power while also helping these underdeveloped regions build out green energy infrastructure. This disproportionately helps the world's poor.
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So then, why the hostility?
Could it be that #Bitcoin is a threat because it really is superior money? Bitcoin adoption is already rising faster than previous technological revolutions--even the Internet itself.
Now is the time for them to stop it, if ever…
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Could it be that #Bitcoin is a threat because it really is superior money? Bitcoin adoption is already rising faster than previous technological revolutions--even the Internet itself.
Now is the time for them to stop it, if ever…
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But can you stop an idea whose time has come?
Bitcoin solves the double-spend dilemma, but equally important are that it's fixed supply and incorruptible.
Bitcoin removes the political intermediaries who cannot help themselves from debasing fiat currency.
C: @VisualCap
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Bitcoin solves the double-spend dilemma, but equally important are that it's fixed supply and incorruptible.
Bitcoin removes the political intermediaries who cannot help themselves from debasing fiat currency.
C: @VisualCap
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@VisualCap The U.S. dollar has been DeFacto global currency since Bretton Woods, but it's losing its status due to the heavy price you must pay to participate.
The U.S. prints at will, debasing the value of reserves. Others must also report & restrict dollars according to U.S. policy.
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The U.S. prints at will, debasing the value of reserves. Others must also report & restrict dollars according to U.S. policy.
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@VisualCap The Ukraine War was a precedent as the U.S. sanctioned dollar trade, ultimately seizing Russian accounts, also threatening sovereign nations for disobeying U.S. policy.
Few thought the U.S. would go this far. Now feeling vulnerable, they are scrambling for alternatives.
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Few thought the U.S. would go this far. Now feeling vulnerable, they are scrambling for alternatives.
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@VisualCap #Bitcoin also brings equality through Proof-Of-Work (POW). Unlike both fiat and Proof-Of-Stake (POS) where the rich make all the rules, POW values each coin equally and protects them. Everyone’s wealth is sovereign.
Perhaps that's what banks and governments are afraid of?
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Perhaps that's what banks and governments are afraid of?
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@VisualCap The word "crypto" is often used synonymously with Bitcoin, but it’s not accurate: Most cryptos are POS, many are little more than Ponzi schemes.
Only Bitcoin is finite, immutable, decentralized and secure to defend against nation states.-They won't make that mistake twice.
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Only Bitcoin is finite, immutable, decentralized and secure to defend against nation states.-They won't make that mistake twice.
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@VisualCap .@VitalikButerin broke away from Bitcoin with #Ethereum because he was impatient about blockchain’s potential.
While #ETH has value as a programming language, it can never replicate the integrity of Bitcoin and has already had to reboot its chain once.
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While #ETH has value as a programming language, it can never replicate the integrity of Bitcoin and has already had to reboot its chain once.
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@VisualCap @VitalikButerin Central Banks stand to lose direct control over Trillions of dollars in money system if Bitcoin succeeds. Therefore, they are unlikely to welcome it, even if it would be best for public good.
Instead, they promote Central Bank Digital Currencies (CBDCs).
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Instead, they promote Central Bank Digital Currencies (CBDCs).
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@VisualCap @VitalikButerin #CBDCs have blockchain advantages with the exceptions of Bitcoin's immutability and decentralization.
CBDCs are efficient, but can be infinitely inflated or programmatically controlled …even censored.
CBDCs ignore the fundamental problem: abuse by the government itself.
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CBDCs are efficient, but can be infinitely inflated or programmatically controlled …even censored.
CBDCs ignore the fundamental problem: abuse by the government itself.
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@VisualCap @VitalikButerin #Bitcoin's tamper resistance is its strength. It doesn't have to be fast nor flexible. Instead, it's the layer of trusted value and the ultimate arbiter for any layers built upon it.
Layer-2 solutions like @lightning add fast, cheap and power-efficient transactions to it.
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Layer-2 solutions like @lightning add fast, cheap and power-efficient transactions to it.
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@VisualCap @VitalikButerin @lightning #CNBC hilariously bemoaned how Bitcoin & Lightning would "Cost Western Union $400M"!
...but then downplayed that this was done by saving impoverished laborers that much in remittance fees.
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...but then downplayed that this was done by saving impoverished laborers that much in remittance fees.
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@VisualCap @VitalikButerin @lightning Ultimately, all Ethereum’s functionality can be added to layers, but will have the inimitable immutability of a Bitcoin base layer.
@Jack is now proposing exactly this with his "Web5" initiative.
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@Jack is now proposing exactly this with his "Web5" initiative.
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@VisualCap @VitalikButerin @lightning @jack Convincing everyone to shun Bitcoin for other chains--especially POS ones, stalling it from replacing the current inequitable money system with a fairer and more efficient one or banning it outright are really the only practical strategies to maintain the status-quo.
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@VisualCap @VitalikButerin @lightning @jack So, if there's a case for #Bitcoin's value and its future, the last question is:
"Does Bitcoin stand a chance of survival against the hostile 'powers that be' "?
The answer here is also "yes".
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"Does Bitcoin stand a chance of survival against the hostile 'powers that be' "?
The answer here is also "yes".
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@VisualCap @VitalikButerin @lightning @jack #Bitcoin has been accepted as national currency in El Salvador with at least a dozen other nations considering the move.
In the U.S., politicians in several states are proposing legal tender status, while "crypto" as a whole is rapidly building political clout.
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In the U.S., politicians in several states are proposing legal tender status, while "crypto" as a whole is rapidly building political clout.
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@VisualCap @VitalikButerin @lightning @jack On the front-line, the sometimes fractured "crypto community" is rallying to defend against attacks, forming PACs and pushing back against even state actors.
The SEC has been warned by @Grayscale that it will be sued if it keeps stalling its ETF.
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The SEC has been warned by @Grayscale that it will be sued if it keeps stalling its ETF.
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@VisualCap @VitalikButerin @lightning @jack @Grayscale .@coincenter filed suit in federal district court vs. the Treasury Department, challenging the constitutionality of its amendment to the tax code that requires anyone receiving $10K or more in crypto to report not just the name of the sender, but their social security & DOB.
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@VisualCap @VitalikButerin @lightning @jack @Grayscale @coincenter The Lummis-Gillibrand bill in Congress to integrate crypto into the U.S. financial system encourages “responsible innovation”, classifying digital assets and defining jurisdiction between the #SEC and #CFTC.
It also outlines consumer rights including tax & reporting relief.
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It also outlines consumer rights including tax & reporting relief.
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@VisualCap @VitalikButerin @lightning @jack @Grayscale @coincenter There are many other examples, but in conclusion:
With its utility, integrity, incredible security and strong community with its own legal and political clout, Bitcoin needs only time before most people understand its unique value proposition.
-End.
With its utility, integrity, incredible security and strong community with its own legal and political clout, Bitcoin needs only time before most people understand its unique value proposition.
-End.
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