In 2015, a co-worker approached me, one of the most technical in my office, and had asked if I wanted to pool our funds to build an Ethereum miner. I had researched Bitcoin, Litecoin, and even Dogecoin years prior, but was never in a financial position to be able to acquire any. Knowing nearly nothing about Ethereum, but being in a more comfortable financial position (and also a degenerate gambler), I said yes, and started the process of finding other investors to build out our rig.
This was the true start of my journey in to cryptocurrencies. In the last 6 years, I have progressively become more of an enthusiast, investor, and advocate trying to spread the good word. While on this journey, the more time I spent learning about cryptocurrencies, economics, and the purpose of money in society, the more that all roads led to Bitcoin.
The road was anything but a straight line. In my first bull market, I witnessed and participated in the ICO craze of 2017, regularly purchasing bitcoin only to convert it into now nearly worthless tokens, countless times. I consider myself skeptic, yet found myself getting caught up in the hype and “investing” in what I now know are scams.
My generation has seen a surge of retail investing, an effect of both the accessibility of the tools for the common-man to be able to trade options and a fervor only possible by being exposed to the worlds largest casino. Watching people go through this journey, many times cryptocurrencies becomes a focal point of their attention, and time and time again, I see people naturally falling into the same traps that I did.
“It’s too expensive.”
The psychology of seeing a $40,000 per bitcoin seems to have an interesting effect on people. The first thought that hits them is that “I’m too late, the price is already too high, and I’ll never even be able to own an entire Bitcoin” (Ironically, this is what I thought when the price was at $600 as well)
This inevitably leads to going down the list on Coinmarketcap and seeing XRP priced at 0.33 and thinking, “wow, that’s cheap! maybe this one day will also soon be worth $40,000.
When the SEC announced charges against two senior Ripple Labs executives on the premise that XRP was actually an unregistered security, the price of XRP plummeted by 68%. Over the next 14 days, other well-known, low price-per-token coins such as ADA (0.12c at the time) XLM, (0.28c at the time) rallied over 100%. Eventually, I learned, as I’m sure the #XRParmy will one day also figure out, that what mattered was how large my share of the pie was, and not some artificially suppressed price per coin enabled by massive circulating supply.
Going back to Bitcoin core argument being “too expensive” consider this food for thought:
|Total Value of:||2020 Market Cap||Price/BTC|
|Gold (Traded)||$3Tn USD||$161,122.55|
|Gold (Total)||$10Tn USD||$537,000|
|Real Estate||$228Tn USD||$12,245,000|
|Global Wealth||$360Tn USD||$19,344,000|
Now I’m not here trying to pander a ridiculous idea that Bitcoin will overtake real-estate ownership and replace all global wealth (or am I?), but it is clear that many people are beginning to resort to Bitcoin in lieu of more traditional stores-of-value (SoV).
What is interesting is that by the time Bitcoin reaches a level of adoption which finds it’s price/coin at over a million dollars, and becomes a global reserve currency and unit-of-account, we wont be pricing Bitoin in USD anymore, rather, we will be pricing real-estate in BTC.
“I want higher returns”
Another reason that people avoid Bitcoin is that although they believe in cryptocurrencies broadly, they believe that greater returns are possible. A large majority of alt-coin projects can be likened to penny stocks as they represent small companies with unproven product-market fit. It is certainly possible to generate outsized returns, but it comes with a ton of extra risk.
Trying to pick a moonshot in a sea of shitcoins is probably better odds than hide the pain Harold going to the casino, but here’s the thing, as I write this, the long term price target for Bitcoin is more likely to be $1,000,000 than it is to be zero. A few reasons I believe this to be so:
- Bitcoin’s longevity, security, and network effect make it the likely category winner for digital SoV.
- Institutional inflow, makes it difficult/impossible for government bans.
- Institutions have both political influence and robust legal teams.
- COVID make money printer go brrrrr.
- Increasing demand with a decreasing supply means number go up.
Now if this is the case, were talking about a 27x+ return. A 15,000 dollar investment should yield the equivalent of decent condo in the future. If it isn’t enough for you, then leverage. Take out a loan, sell your car, trade on leverage exchanges (but be fucking careful!) do something so that you can catch this wave.
Nearly every single alt-coin, including all of the darlings such as ADA, EOS, XTZ, XLM, XRP, LTC, TRX, ICX of the 2017 alt-coin craze have depreciated in value against BTC over 90% since then. With DeFi tokens now seeing meteoric gains in the current bull market, the temptation is strong to hop on-board with SUSHI, AAVE, and CAKE. It’s possible to become a successful day-trader, but hold yourself accountable by comparing your gains to just buying and holding bitcoin, and then think about all you could be doing with that extra time trade to make more money to buy more Bitcoin.
“Elon said dogecoin wow”
Ah yes, referral, the most powerful form of marketing. Look, I am here trying to sell you Bitcoin which makes me no better than Chad over there. We are also labeled as the generation of low attention spans, and instant gratification, but we have the opportunity to challenge this prejudice and decide for ourselves.
This is the same advice that every other person who is remotely credible would tell you. Do your own research. If you are crazy enough to take out a loan against your house and dump it into a rando-shitcoin on the word of someone else, well I envy either the size of your balls or the lack of folds on your cerebral cortex. If you were to make the same move after carefully developing your conviction and strategy through assessing conflicting opinions, then bravo my friend, bravo.
Here are some of the strongest pieces of content I’ve come across which have orange-pilled me.
- Book: The Bitcoin Standard – Saifedean Ammous
- Book: The Price of Tomorrow – Jeff Booth
- Writings: Macro Economist – Lyn Alden
- Videos: Microstrategy on Bitcoin Macro Strategy
- Podcasts: What Bitcoin Did
- Book: Sapiens – Yuval Noah Harari
- Magic voodoo chart research:
- Twitter: @nic__carter @woonomic @CathieDWood @laurashin @vitalik.eth @documentingBTC @michael_saylor
Don’t touch the fucking stove!
Honestly, I touched the stove many times, I still touch the stove because I am an idiot, you’re going to touch the stove, we all touch the stove, and this is how we learn.
It’s in our childlike nature that we have to try and fail, and the most curious of us will ultimately need to touch the stove to realize that the stove really burns. And while we hold our hand under the sink and reach for a painkiller, we will realize that pill is orange.