Why Bitcoin Will Prosper Despite Macro Uncertainty

September 4th, 2022

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We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.

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-Roy Amara

The Lindy Effect posits that the longer something has been around, the longer it is likely to stay around. Bitcoin could have failed already, yet it hasn’t. For each day Bitcoin remains standing, it’s chances for long-term survival increases. Bitcoin will see greater regulation which will bring greater innovation which will bring in greater adoption. From where things stand, Bitcoin is an “All or Nothing” technology leaning closer to “All” than “Nothing”. To be clear — Bitcoin will prosper.

Public Policy: Playing By The Rules

Regulatory oversight will undoubtedly create winners and losers as governments decide how they want to steer the crypto industry. Whether it leans more laissez faire or favors the more controlled, dominating side, we will have to see. In either case, two things are certain. First, greater guidance clears the way for greater competition + thus better choices for Bitcoin ETFs, ETPs, 401K s, etc. once policymakers provide informed Bitcoin + crypto guidelines. Second, should a major nation like the US or Russia cosign Bitcoin in any meaningful way (even if its a preemptive economic warfare tactic), expect more countries to enter the BTC “Sats race”. Just know, if “hyper Bitcoinization” is the future, crypto regulation comes in tow.

Financial Applications: Bitcoin as Money

El Salvador’s move to officially recognize Bitcoin as a national currency has been divisive to say the least. No matter how the experiment goes, tremendous ramifications will be playing out over the coming years. On one hand, the decision raises the viability of mass adoption as countries seeking greater autonomy legitimize the assets’ use as a unit of account + store of value. Perhaps even more attractive to these pioneering countries is the profit potential of large scale BTC accumulation.

On the other hand, the likes of the IMF + World Bank hate to see ascending nations reclaim their economic sovereignty. Finding states on the verge of total financial ruin before swooping in with a predatory loan that assures allegiance is their preferred modus operandi. Such methodology explains why the BIS rejected El Salvador’s request for help in implementing the Bitcoin standard yet champions CBDCs. What a coincidence that the price of BTC collapsed by ~20% on Bitcoin’s inaugural day as a national currency.

Large scale social behaviors will determine Bitcoin’s fate. With “free” nations like Canada invoking emergency powers to coordinate broad strokes financial censorship of their “dissidents”, more are realizing the importance of decentralized money. As the halving cycle drives price while incentivizing network security, status games coupled with a desire for acceptance will push Bitcoin operations + crypto businesses to go carbon-negative, ultimately accelerating green energy use. More interest in crypto means more investments toward educating consumers about the technology + its possibilities. Such knowledge may drive BTC adoption when compared against CBDCs.

Institutions such as Argo Blockchain, organizations like Michael Saylor + Elon Musk’s Bitcoin Mining Council, & events like the “The ‘B’ Word” conference hosted by Jack Dorsey + Cathy Wood in July 2021 clearly communicate Bitcoin’s need for an elegant solution to its energy consumption issues. Though a phenomenal hedge against fiat + endless quantitative easing, institutions will remain on the sideline until they feel confident Bitcoin fits into an energy compliance framework that satisfies their green mandates. Otherwise, firms risk political + PR blowback. The entire crypto market will need to align with the green politics of the times before major public entities join en masse.

Own the future, today.

Talk to you soon, tribe.

Peace + blessings. ✌🏾🙏🏾