Foooism #69 = “Alpha” in markets exists as a function of the distance between a plausible dream and its realization.
And really not just in markets, but in all areas of life.
Think of the “Alpha” personality type that architected civilization and drove it forward, promising safety, security and prosperity in exchange for prestige, power and value. As this goal draws nearer and nearer to being reached, the socially-perceived purpose of the “Alpha” becomes steadily more obsolete and culture has begun punishing it accordingly rather than revering it, now that it has delivered the realization of its promise. The government and big tech themselves are, as conceptual entities, the last true respected “Alphas” now, while it is largely a meme in common parlance amongst the plebs.
Welcome to the physics of reality that drive all market forces.
So too will it be with Bitcoin.
Bitcoin was the first “Alpha” of the crypto market. It promised security, materialist gain in exchange for increasing value. However numba has gone up a lot now. It sold the public on a plausible dream and now that dream draws ever nearer to its realization…And while fooo thinks that in the short term, in a bull market, market cap is an irrelevant meme… in the long term, Bitcoin won’t be reaching a quadrillion dolla market cap or whatever. Eventually even the most blindly ardent (sane) bitcoin maxi will admit there’s going to be a ceiling.
Most folks nowadays accept that Bitcoin is safu. Instead of the risk being the failure of the network or whatever, now the premiere risk of holding Bitcoin is that numba simply not go up enough anymore to justify hodling it versus a basket of say 3 viable L1s and 3 spicier plays.
If you’re a hodler, you’ll probably be fine for awhile. Bitcoin goes what? Another 10x ish to $1,000,000?
Wasn’t a milly always the meme target? The impossible but plausible dream?
fooo doesn’t get out of bed for a 10x in a crypto bull run…Even with cyclicality, and buying the pico bottom. Say bitcoin ends up at $120,000 and falls to $50,000 next bear market and then goes to a milly. That’s a 20x maximum. Meh. “Big Money would LOVE a 20x FOOO.” you might be mumbling, irate. fooo said meh. M.E.H. meh. Big Money doesn’t know what the fuck its doing 90% of the time. “but LIQUIDITY DYNAMICS FOOO. It’s hard to get filled with size on other coins!” Meh. That won’t last.
So the next bull run going to be interesting.
Should we accept the premise that cryptocurrency remains cyclical in this primordial ooze stage, and that it remains largely monolithic as an asset class?
If so, more folks, especially swing traders and cycle traders, and investors large and smol, are going to exit Bitcoin and play other coins for more alpha. Greedier investors will leave Bitcoin. Poor people for whomst a 10x will not change their life will leave Bitcoin.
Granted, maybe Bitcoin “finds its water level” higher? 5 mil? 10 mil?
The variables change, but the ultimate principle idea here remains the same.
Eventually the game theory of hodling Bitcoin will shift and sell pressure will occur organically as people exit for higher RR plays and more alpha. When that happens, THAT’S Bitcoin “finding its level”
Eventually, the plausible dream will be realized and the alpha will be gone.
How soon do you want to try and front-run that, anon?
Furthermore… What happens to a market that has largely tracked BITCOIN’S cycle when it does?
Do we see agnosticism in certain sectors of crypto? Does the entire macro seasonality of this ponzi smorgasbord shift?
We’ll have to see.
In the meantime, fooo is wonders if, as a cycle trader, there is ever a reason to hodl much Bitcoin at all. There are safety-inducing cultural moats around sexier plays now. Bitcoin underperforms in a bull market, it only “draws down less” in a Bear market.
For the cycle trader, surely the >100 IQ play is simply to play a small basket of alts on the way up, and sell most high, then wait for the drawdown, while keeping enough as a hedge against infinite upside...
At what point will the scales tip and Bitcoin’s water find its level… who is to say. Savvy folks who have profited off of how EZ this market has been may have to start doing fundamental research again…
If you’re gigawealthy? (Or if you already own a ton and want to publicly defend its viability until you distribute) Sure, why not own some Bitcoin for now and play wait-and-see. Maybe it really will be as the narrative now suggests: wealth preservation and preference. Perhaps best to be prepared, also, to check your biases at the door, in case it turns out to look like it won’t…
