What would it look like, if an emergent money was being monetized?

Often when I talk with academics or other high-IQ critics of bitcoin, it’s the volatility and seemingly speculative aspect of it that turns them off. It’s almost distasteful to them. They can get behind the idea of global open-source payments and so forth, “but that’s not why people buy it” they’ll say. “They buy it because they’re speculating. It’s too volatile for its own good.” Some aspect of them dislikes it in principle, almost *because* one can make money from it.

But a new decentralized money, including its own unit of account and liquidity, doesn’t just emerge as a multi-trillion dollar-equivalent network out of the box. In order to go from zero to trillions in market capitalization and liquidity, it needs upside volatility. And with upside volatility comes speculation, leverage, and downside volatility. Cycle after cycle, it’s priced like an option. At first it’s like a 0.1% chance that it succeeds in the long run. And then in the next cycle it’s like 1%. And then in the next cycle it’s like 5%, and so forth. So, early capital allocators that have seen a thing or two and know the high failure rate of new ideas will say, “This’ll probably fail, but if it doesn’t, both the investment gains and the macro implications will be enormous.” And then 15 years into it with a few more cycles under its belt, the probability of success looks less like a distant moonshot and more like a real possibility, and then eventually starts to look like the base case. In the beginning the question is, “how will this succeed?” and at later stages the question becomes, “what risks could prevent this from continuing to succeed?”

The process of buying bitcoin is often a speculative process at first, but then as people learn more, they often view it differently. Those that really want speculation will then continue down the pipeline of altcoins- there’s always some shiny new object to try to speculate on. On the other hand, those who begin viewing bitcoin as money, start to view it as a defensive or risk-off act to hold a piece of this liquid and globally decentralized network of value. One would feel too financially exposed not to.

Creo que Bitcoin ha llegado justo a tiempo, pero no tanto para combatir la impresión infinita ded fiat, sino para combatir un ejército de bots capaces de escribir mejor que yo.

I see a lot of posts about Thanksgiving discussions on bitcoin. It’s usually from the American-style perspective, like trying to convince your normie drunk uncle and aunt, and they often don’t see the demand since they have top-tier money and their downsides are subtle. They are like, “why the fuck does someone need a BitCoin?”

Meanwhile, my husband’s equivalent Thanksgiving discussion will be far easier, since he is in Egypt with our family managing a new property build-out for nine people that we are doing, and their bank just blocked my payments to them for the next capital infusion for no stated reason. So now we have to do a bunch of janky high-fee remittance workarounds for a time-sensitive payment (like making your mortgage) and then expend our human capital to go to the bank in the US and figure out where this got blocked (our bank didn’t specify, but implied on Egypt’s side). Every bank sucks here. None of them were clear, which means the customer has to investigate.

The idea of self-custodial global open-source money would be inherently interesting to my family’s dinner if it catches on and starts to have more liquidity points in Egypt like it has in Argentina, Turkey, and Nigeria.

Meanwhile drunk Americans will be like, “What does a BitCoin do, lol?”

Hey Milei, can you do this?

585. No fear

fee burden remains a difficult concept to explain to users in high fee environments

Bitcoin is more correlated with global liquidity than any other asset I track. Liquidity doesn't generally tell you the *magnitude* of what bitcoin's price will do, but it has a pretty strong push/pull on the *direction* that bitcoin's price goes in, all else being equal. It's not the only variable, but so far it has been a meaningful one. The mechanism is that it affects the rate at which new external capital tends to come into bitcoin.

Bitcoin supply halvings are an expression of its hardness. And the direction is always harder.

Global liquidity is an expression of fiat currency hardness. Usually it gets softer over time, but with brief periods of hardening. And fiat currency is much larger overall, so it affects a lot of asset prices including bitcoin. Due to bitcoin's inherent moneyness (lack of earnings or other dynamic factors) it tends to correlate to liquidity more tightly than other assets.

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✔️ Para que se hagan una IDEA 💡

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🤷🏻 Visto y Vivido lo que estamos viviendo ya les digo yo que esa WALLET es el MAYOR TERROR para los Ciudadanos de lo que nadie IMAGINA 😪

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