AI will suck at Bitcoin, and institutional adoption isn’t the answer. Bitcoin HODL’ing is a UNIQUELY human action,
https://risk-fundamentals.ghost.io/hodling-is-a-human-action/
Discussion
I thought of a very interesting implication if you are right.
Money is power. If only individuals can properly hodl bitcoin, then the balance of power between organizations and individuals is about to face a huge shakeup. Right now large organizations control most of the money and wealth. This would put the pendulum far at the other end.
This is 100% my worldview. Institutions just don’t have the will that an individual can have. Only an institution that can win hearts and minds and summon the free will of its individual members will make it. Otherwise individuals will realize they don’t need them and they will be willed out of existence by them.
Leaders of these institutions because of their connection to the individuals, can lower their time preference to the level of the individuals and act as a voluntary collective. El Salvador is an example - they have authoritarian style power because they have summoned a 90%+ approval rating. They did this by winning hearts and minds. Enabling Bitcoin also greased the slides.
Do you think the aversion of organizations to hodling will subside if the value of bitcoin against goods and services stabilizes?
I know Apple has a large cash reserves, but that is unusual for large organizations. Cash reserves are disincentivised by inflation, so cash reserve behavior today won't directly translate to stable bitcoin hodling behavior.
I’m not sure I’d call it an aversion. It’s more like a law of physics. Apple might enthusiastically jump into Bitcoin tomorrow but the pressure to get rid of it will exceed their will to hold it. Only a super convicted human is capable of overcoming that pressure.
Apple might have more will than most companies but they are still limited.
The other thing is that the idea that Bitcoin will stabilize against goods and services is related to the sell pressure on individuals and institutions. I’m not sure it ever arrives or reduces that sell pressure.
In a few decades I think bitcoin will just be money, although likely mostly on some L2. I base that on the better technology always winning throughout history.
If that is so, at some point the sats/goods will stabilize and $/goods will become volatile. Sats/$ will likely always be volatile because one of the other is having wild swings VS goods due to low liquidity.
At that time I see corporate treasuries in #bitcoin. I think large stacks will still be odd. If you want me to buy your stock, you need to be investing in growth or technology to beat standard deflation. Why take on the counterparty risk of holding MSTR if I can just hold bitcoin directly?
Even today, people love apple stock because of their war chest. I think it is time to sell because that proves that are out of ideas.
I think by then we’re done with the HODL stage and move into the use & earn stage. Companies become a much more relevant part of that world.
I don't think the hodl stage ever ends. That is kind of the point of a fixed supply. I get paid and I don't need to rush to get that spent on some asset before it is inflated away. I just keep the thing I got paid in forever or until I need or want to buy something.
In today's terms, 10% bare minimum of income still goes to rainy day / retirement multi-sig. Most incoming stays on something like a tapsigner for groceries and such and gets spent.
The purpose and drives of an individual and an organization are different for evolutionary reasons. Samsung could kill apple by out innovating and out earning. My neighbor can't do that to me the individual. That means I can just save and be fine as long as I use hard money. Apple must invest in new tech, or new markets or someone else can and will drink their milkshake. Saving more than a small amount relative to revenue hurts their chances of long term survival. For me, larger savings increase my chances of survival and thriving.
Today we Hodl upwards of 95% of our stack. That metric will decline over time to where we’re no longer characterizing this era as HODL’ing.
The earn and use phase might still have 5-10% HODL’ing, likely far less.