My Bitcoin is down by more than $100,000 and I’m grinning. 13 years on, we’ve heard it all before. Here’s what is missed.
Saying Bitcoin is dead is nothing new.
It’s become so common that a website that tracks this bizarre phenomenon has recorded 416 times Bitcoin has been declared dead … and survived. Bitcoin rising from the dead is programmed into its code. Bitcoin will be declared dead many more times because it’s a silent protest that challenges the status quo. 13 years on, Bitcoin is still alive and breathing and roaring back to life.
My own Bitcoin portfolio is down more than $100,000. I am grinning at all the losses.
Here’s what is overwhelmingly misunderstood:
Bitcoin is a religion.
One of the greatest investors of all time, Paul Tudor Jones, snuck a comment into a conversation with another legendary investor, Stan Druckenmiller. This comment changed my understanding of what Bitcoin is.
“Do you know that when Bitcoin went from $17,000 to $3000 that 86% of the people that owned it at $17,000, never sold it?”
John Street Capital on Twitter summed it up beautifully: “86% of the [Bitcoin] owners are religious zealots.” That’s why hedge funds and Wall Street are loving the huge crash in the Bitcoin price and buying more, not selling like retail investors.
The network effects of a technology are huge and explain a lot of the enormous growth we’ve seen in stocks such as Amazon, Netflix, and Facebook. Bitcoin has even greater network effects than Web 2.0 tech companies. But Bitcoin also has a fiercely loyal user base that won’t disappear, even when 50% of the value of their investment drops. Bitcoin isn’t dead.
The power of religious user loyalty is misunderstood.
Bitcoin doesn’t need influencers to market itself.
The adult babies saying Bitcoin is dead are influencers looking for clicks. You can’t be angry at adults trying to buy food and pay their bills. I get it.
But Bitcoin is an unconventional technology. It has no payroll, no office, and no marketing team. Bitcoin relies solely on word of mouth to survive and grow. There’s another thing that is missed.
Bitcoin is now a brand.
The Bitcoin car in the Indy 500 shows quietly what Bitcoin is becoming. Bitcoin is more than a brand, though. Bitcoin is a movement. The movement has one message to share… Stop creating money out of thin air and giving it to the elites and institutions.
Bitcoin users are saying nicely, “Give us free markets again.” When the stock market needs to dip because of high unemployment or a global health crisis, let it. As long as markets are propped up with money created out of thin air, inequality will rise.
Read more: The Ascent