The Great Decoupling

Published in

Coinmonks

4 min readMay 24, 2022

Given the volatility in the markets over the past few weeks, I’m going out on a limb here, and project that we will be seeing the decoupling of bitcoin from the swings of the major market indices (e.g. Dow, Nasdaq) in the not too distant future. Today, 5.24.22, I woke up to the news of social media darling Snap diving 40% on the opening and taking the likes of Facebook (Meta) and Google down with it. This is smart money exiting a long in the tooth business model of surveillance advertising.

I personally believe that NFTs with novel business models yet to be launched will soon capture significant market share from social media advertising. Over time, I believe this will dramatically impact the long prevalent trend of digital marketers relying on search and social ad campaigns to raise brand awareness to sell goods and services.

Of course, I have no exact timing of the great decoupling, but I will wager by the time 2024 rolls around with the next Bitcoin halving, you’ll be looking at a much different landscape than today’s ridiculously low prices of 30k for bitcoin. My reasoning is as follows:

Proof of Work vs Proof of Stake.

There has been a great deal of debate regarding proof of work (PoW) which is “Bitcoin” and many other blockchains that are proof of stake (PoS). Terra Luna was based on PoS even though it was partially backed by some bitcoin. In the end, it was an algorithmic solution that was not based on work already performed. Terra Luna crashed due to flaws in this particular PoS system being exploited. This is a major win for the great debate of PoW vs PoS. Though I do believe that some PoS blockchains still have great utility for velocity of transactions and other applications. The final settlement should reside on a PoW or Bitcoin. This makes moving forward much easier now that we understand how to proceed with Bitcoin being the foundation of financial stability and all other blockchains eventually settling on this foundation. This makes for a much clearer path for developers and entrepreneurs.

2. Developers Keep on Developing

Though this has been a bad couple of weeks for bitcoin and blockchain projects in general the momentum and investment into the blockchain economy are moving at a tremendous pace. Last quarter we saw $10 billion of investment into blockchain development. Just last week N3twork Studios announced a raise of $46M to make web 3 games. In San Francisco, SF Bitcoin Developers Group has 2,670 members. These people think about how to get one billion people on the Bitcoin Lightning Network. San Francisco is actually behind the curve in crypto development when compared to other cities such as Miami, Austin, and Lugano to name just a few cities speeding toward adoption and development. Of course, cities don’t matter as much in a worldwide decentralized movement that allows you to contribute and develop anywhere. We have not yet begun to see the results of the amount of financial and human capital working on projects. New protocols such as Taro that allow issuance of assets on Bitcoin and Lightning network are just now being released for comment in the developer community. It’s akin to thousands of musicians deciding to start a band after seeing Elvis or the Beatles on TV. The momentum does not stop, it keeps going and builds on itself to the point that in the next few years it changes everything, just like Rock N’ Roll did.

3. Tens of thousands of Bitcoiner maximalists and the crypto curious are born every day.

Again, keeping with the Rock N’ Roll analogy, once the seed has been planted eventually it will grow. We are seeing the seed growth from the younger generation with catchy songs like crypto boy going viral. (The song is very catchy so be warned before you listen to it.) Those crypto boys and girls will soon be men and women whose formative years were shaped by cryptocurrency just as the last generation was shaped by the internet and smart devices.

The exact timing of the great decoupling is anyone’s guess. At the end of the day, markets are driven by emotions and sometimes it takes a great amount of pain in order to change an emotional outlook that is deeply ingrained. But as Bob Dylan says “The Times They Are a Changin ‘’ that was in 1964 when Bob was an acoustic popular folk act. By July 1965, Bob Dylan decoupled from acoustic and embraced electric upsetting his traditional fan base but cementing his place in pop music by adapting to the changing times.

Cheers,

Jim

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The Great Decoupling

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Written by Jim Fox