A Bitcoin Investment Thesis.
I would greatly recommend you play this youtube video on repeat while you read this thesis. This is not just a thesis, but a journey into the mind of the bitcoin markets.
Many people will compare the current bitcoin weekly chart to the image below:
A bouncing ball, propelled from it’s initial Kinetic Potential Energy with no other external forces acting upon it. An ideal scenario, and one that would be simple to attribute to bitcoin. An elastic ball slowly losing momentum, a victim of it’s own elastic attributes.
I disagree with this. It implies that bitcoin is a vehicle that moves with it’s own momentum, rather than something that can be willingly propelled along by humans.When the ball is dropped, it’s path is determined. Nothing can adjust this. This simply doesn’t apply to markets.
This brings me to the main part of my thesis. The true bitcoin comparison. Bitcoin isn’t a bouncing ball. It’s the Euthanasia Roller-coaster.
Rollercoasters have many forces acting on them. Kinetic energy, Drag, and most importantly, the motor force propelling the wheels. You can’t change the momentum of the ball. When you’ve let it go, you’ve let it go. It is outside of the bounds of your manipulation (unless you kick it, but who would do such a dastardly thing? This goes against bitcoins main principle of being something that can be bought and sold. At any time the roller coaster can be accelerated or decelerated. It’s own momentum is the main driving force until it isn’t. Until a switch is flipped, and the brakes / motors are turned on.
Bitcoin has many more similarities to a roller coaster than a ball. Primarily, most will agree that bitcoin has certainly been a very wild ride up until this point. Much like a roller coaster can be defined as a wild ride.
The core principle of the Euthanasia Rollercoaster (as designed by Julijonas Urbonas) was to eventually extinguish the life of the riders. It’s structure has only one goal. To make sure that everyone who got on the ride at the start, doesn’t get off at the end.This is very similar to the current bitcoin weekly chart, where every high is dramatically rejected. Just when you think the ride is over, there’s another dump into the triangle. You go for another loop, one step closer to death. 10k could have been the breakout of the downwards trend. As could have 8.6k. As could have 7.4k. However none were. The rollercoaster continued to loop, and people continued to get murdered.
There were many willing participants on the initial pump to 20k. Everyone was excited. Then the first dump happened. 6k came. Vast numbers of people, broken by the move, decided to leave. However many remained. Why, this type of movement had always happened to bitcoin, and it had retraced every dip prior, so why not this one? The ride moved up. As we approached 11k, euphoria struck in again. People became excited at the prospect of a breakout into new highs. A breakout that never came, as the roller coaster aggressively descended for another loop. 10k was the big one. Finally, bitcoin is 5 digits again! Stalled at $9998. Every time bitcoin ascended, it ascended less, however it’s descents always found foundation at the trustworthy level of $6000. Every loop eliminates a few more.
A roller-coaster needs a base. A place to bury the metal rods that prop up the multi tonne titan. This is very similar to bitcoin, for the corn to be truly “propped up” it needs it’s foundation at that oh so important $6k level. (From now on, I will be referring to this price level as the $100bn). The $100bn level holds because if it doesn’t, immense market structure is suddenly nullified. The entire roller-coaster collapses. This is in no ones interests. Not the ride operators, who want to continue to utilise the attraction, and not for the riders (Death by metal rods crushing your chest isn’t… that attractive).For the bitcoin ride to continue operating, the $100bn level must hold. This is not how the euthanasia happens. The euthanasia happens from trying to get “higher low”. We all know it will bounce at $6000, yet we long 8000, 7000, 6600, thinking finally it’s going to make a dramatically higher bottom.Dreams are crushed as the rug is pulled out from beneath us. Yet again, the scam commences.
What happens when the ride is over?
Well, what always happens. The ride begins up again. People suddenly realise that the ETF will be shoehorned in through Hester Peirce’s stubbornness. Bakkt will enable bitcoin investment in a much simpler manner than even Coinbase, enabling investment products and portfolios to more easily include $BTC in their assets.
I hope this thesis has resonated with your mind while the smooth testimonial resonates with your soul. I leave you now with a quote from our beloved CryptoMom herself.