This is the best article I've read in... I don't know how long. But I understand your time is limited so here are the CliffNotes. And of course, we're talking #Bitcoin, Federal Reserve and @JeffSnider_AIP (plus bonus content at the end).
Jeff Snider (Head of Global Research at Alhambra Partners.) is the world's leading expert on the Fed (imho). He's been on the @MacroVoices, published a series called Eurodollar University and a show on YouTube called "Making Sense."
In this article he argues that "Decentralized Money Is the Future." Going back to the invention of the printing press, it was decentralizing knowledge in an accurate way that created a tidal wave of change across the world, long before the information superhighway.
Let's talk about narrative economics. A lot of people think that for #Bitcoin to succeed, the US Dollar has to fail. But that's just a story. A lot can happen along the way, and what about second-order effects?
One plausible outcome is that bearish USD folks latch onto a narrative, which boosts #Bitcoin. But then something changes in the market. Maybe inflation starts to spike and we finally think "wow, we should balance the budget" and then elect a bunch of deficit hawks?
In order to put this into perspective, consider this chart in linear scale. It should be apparent that if this trend continues this figure will surpass the ATH very soon.
If you're wondering why this matters, consider that the value of Bitcoin is derived (at a high level) from the network. The larger the network, the more useful and valuable Bitcoin becomes. Sprinkle on some QE infinity, and wait for the fireworks.
Be careful about assuming that the long-term impact of Covid-19 will be minimal (v-shaped recovery). We've never had so many dislocated workers. Even now the figures are greater than any other point in history.
Why isn't there blood in the streets? Well if you can't make your house payment then why not just punt the payments out six months? Still in trouble? How about another six months? Kicking the can has to end at some point. It's all a house of cards.
It should be obvious that digital currencies are the future by now. Prepare yourself for whatever comes next with an allocation to #Bitcoin.
Does anyone else think the way we're responding to Covid-19 in the USA might actually be worse than the virus itself?
Don't get me wrong, COVID is real and yes we need to respond to the threat it poses. But let's look at what's actually going on. Recently walked to Starbucks for a coffee, wanted to wash my hands - bathroom closed to due to covid. But wait a minute...
When I walked in I touched the door handle, and then I touched a piece of merchandise (a coffee mug) and nobody rushed out to wipe them down with a cleaning solution. Number one recommendation of CDC, wash hands... 🤔🤔
Bitcoin is one of the most powerful tools for the protection human rights in this digital age. All money is becoming digital, it's just a question of which digital money will dominate. Will it be a state-controlled, privacy-invading fiat, or Bitcoin?
We must not take Bitcoin for granted. The wolf is always at the door. Bitcoin needs continuous improvement in scalability, privacy, security, and usability to reach mass adoption. If the only sponsors of dev work are large corporations, we will be doing ourselves a disservice.
In case you missed it, I published "Whales and Retail" as part of the Kana and Katana monthly update. This novel approach suggests that whales are more likely to be trend following, while retailers tend to be value investors.
The approach uses network data and exchange flows to segment different market participants into "whales" and "retailers." Using Wyckoff we can make some guesses about how these two groups attempt to make the best of each other.
Another interesting observation is that market bottoms tend to happen near the "bottoming signature" which is what happens when both whales and retail accumulate #bitcoin at the same time, causing a supply shortage on exchanges where price discovery happens.
I have to say this about "Fear Mongering" and "Making decisions based on fear." This has become a catch-all phrase that is intended to discredit the person who dared to let "fear" run them or spread this to others. You do realize fear is why we survived as a species?
Consider this. What stops you from walking out into traffic? Pretend for a moment there is traffic... bear with me here. I hope it's the "fear" of being crushed by a car which is actually completely rational. Why do we look left, look right, then cross the road?
Even if there's no car directly in front of me I can determine that if a vehicle is heading towards where I WILL BE, then I shouldn't try to cross the road right now. When we see a trend, like a moving car or spreading disease, we attempt to avoid a terrible outcome.
While it's clear that speculation is one of the primary use cases of Bitcoin, I still hold that there is underlying value. At some point, there has to be or how do you attract smart people and get them to write code for free? How do you get anyone interested in the first place?
To that end, I've been writing about Bitcoin Valuation Models for a while now as have many others. Let's just touch on some of the interesting work that's out there and see where we are now.
Welcome to the Fourth Turning. At this time, we have entered the "crisis stage" as defined by the generational shift currently in progress. Boomers are retiring, handing the reins to Gen-X, and Millennials are entering their wage-earning years. Let's look at some data.
First, let's talk about home prices and wages. Between 1974 and 2018, real personal income has increased by 37%. However, median home prices have increased by 768%.
Brush this off, or let me explain how and why it will happen. It all started in 1944 with the Bretton Woods System. Countries abandoned the gold standard for the dollar standard, but the USD was still redeemable for gold.
This is one thing that grates on me. If you're a Bitcoin thought leader these days it's all about the SoV narrative. Don't box yourself in. With LN, Bitcoin can be both an SoV and an MoE.
Imagine the greatest method of exchange in the world. It would have to be super fast, secure, and anonymous. Now imagine the greatest store of value in the world. It would have to be secure, scarce, accepted globally and not controlled by a central party. All roads lead to BTC.
In 1838, Abraham Lincoln gave the Lyceum Address, in which he warns against the rise of authoritarian leaders, “it will require the people to be united with each other, attached to the government and laws, and generally intelligent, to successfully frustrate his designs.”
If you take the total number of Bitcoin transactions ever confirmed and use that as an input into a log-scale linear regression model, we learn two things 1) Bitcoin is still alive 2) the price is actually pretty close to where it should be.