In cryptocurrencies, even the most seasoned professionals are less than a decade old, but you probably listen to them. Are you sure you should?
Are you, however?
In cryptocurrencies, even the most seasoned professionals are less than a decade old. Many are only a few years old. Some have a lot of experience in other fields, but not in crypto. The technology just hasn’t been around long enough.
In no other industry does a few years of experience make you an expert.
Understanding? Of course.
Knowledgest? Let’s hope.
A good source of information? Yes!
He is not an expert.
When you see people who have a large following or popular books, you may think they have incredible insight that you don’t, even though they mostly say the same thing.
For a culture that prides itself on thinking contrary and rebelling against “the pack,” we sure have a lot of groupthink.
Why? Nobody really knows what is going on. We all have a small piece of a huge puzzle. At best, we have some compilations, ideas, and inferences about the big picture.
Data models abound, but they all disagree with each other. Markets move faster than YouTube can handle. Everyone has their opinion.
A little skepticism goes a long way.
What makes someone else’s opinion better than yours?
For most of my twenties, I worked in congressional politics, first as a campaign organizer, then as a congressional aide, and then as an assistant to the top lobbyist for a Fortune 500 company.
My biggest takeaway from those jobs?
No matter what the facts say, you will believe what you want to believe. Eventually, someone will come to take advantage of your beliefs.
In politics, you can make a living doing this. In fact, there is an entire subset of the industry dedicated to this work. It is a skill that some people practice and perfect for years.
Those who do it well can earn a lot of money as consultants, speechwriters, press assistants, spokespersons, radio hosts, and commentators.
These people train their entire lives on how to turn truth into falsehood and turn fact into fiction. They learn to use semantics, straw man arguments, and distractions to present a false narrative or keep people from the truth.
There is a reason they make a lot of money doing this. People will accept any story that makes them feel good, smart, correct, and safe.
If that story is true or not?
When I got into crypto in 2017, I also believed a lot of stories. Pretty much everything the “experts” said.
At the time, they said that Bitcoin could never crash because CME futures would bring in tons of money and Wall Street would buy the market.
Then bitcoin crashed, dragging the altcoins with it.
To explain the lag in the markets during the first part of 2018, they said that “Asians sold cryptocurrencies to buy gifts for the Chinese New Year, it will rebound after the holidays.”
When prices continued to fall, they said “American investors are selling to pay taxes, it will rebound after tax season.”
When prices kept falling, they said “the whales and Wall Street are manipulating prices down, they can’t do this forever, it will rebound.”
Once the market closed around $ 6,000, they said it had bottomed out.
Then the price of bitcoin plummeted another 50% and most altcoins fell 90% or more.
They blamed Craig Wright, Roger Ver, governments, ICOs, scams, and whatever else they could think of.
They should have blamed themselves.
At the time, all of his arguments made sense to me. I bought them every step of the way, up and down.
Only later did I learn how this market really works.
In March 2020, everyone apparently thought that bitcoin would hit $ 1,000, “go back to the 350-week moving average,” and “complete an ABC correction.” They said we would have a new Great Depression and a collapse of all assets, including crypto. “Deflation, then inflation.”
All of those things were possible. Not just possible, but reasonable expectations for anyone involved in this market at the time.
Any honest account of history would tell you that those outcomes were unlikely. Bitcoin has never stayed below its 200-week moving average, and at the time, on-chain metrics were oozing strength.
Sure, it could have been the other way around. Had he been convinced of that, he would have lost the opportunity of his life.
What’s up today? What stories do you hear?
Bitcoin will rise to $ 288,000 with no big drops because institutions will never let it crash. The price of Bitcoin cannot go below $ 40,000 because Stock-to-Flow says so. Corporations will never sell, no matter how much their investments go up or down in value. The bull market is ahead of schedule, so prices will double for twice as long. The four-year cycle and all other data models will have to be adjusted up because of all this FOMO, you can’t contain it. It is a new paradigm. March is always a bad month for the market.
Anything is possible, but you lose a lot of perspective when you buy those stories. Is it bad to look at these things from another angle?
The price of Bitcoin was up 32% in March, which is not a bad month for any asset.
Corporations and institutions exist to make money, not to own bitcoins. Do you think HODL the next 50% drop or will they not make a profit during the next 100% pump?
Stock-to-Flow and S2Fx allow a very wide variation in price at any given time.
No asset has ever gone up forever.
It is not the worst to keep a small fiat “just in case” things do not go as everyone expects.
Cryptocurrency thought leaders and celebrities may not be as intentionally manipulative as the people who permeate our politics, but they are no less effective, and with the same result:
You end up believing things that are probably not true.
I am sure that Saifedean Ammous did not intentionally present a culturally and historically false portrait of monetary evolution in his famous book, The Bitcoin Standard. You probably don’t know all the discoveries that historians, psychologists, and anthropologists have made about the human relationship with money and its uses over time.
Or maybe he fired them. As an Austrian economist, he has been trained in dogma and orthodoxy. Perhaps you do not accept ideas that contradict your worldview?
The narrative sells. It’s a good story that makes sense.
Crypto is full of good stories that make sense.
That doesn’t mean those stories are true.
Maybe it’s okay to discover your own stories?