Yes, I’m a #hodlr.
No, I’m not a crypto-junkie.
But I can say I’ve got a reasonably keen eye for market-making, and why creating a market is a lot different than playing around in one.
I’m going to make this a pretty quick read as I know we’ve all got things to do. But before I get to answering my own headline, let’s start with one very important graph.
This is my version of what’s happening right now with crypto people.
Yes, we know about the credit card craze in buying up crypto.
Yes, we know about the China mining crunch and ICO crackdown.
There are many, many theories.
In fact, each hold legitimacy on account each bear empirical evidence (reportedly, on that WSJ one). Nonetheless, what we are seeing here, in aggregate, is deciding in what I see as The Crypto Market Pool.
Take a look at that top 15%. That’s the crypto-craze buyers. The uninformed FOMOs. The “bruh, I got crypto”. They seem to have this concept of getting rich quick if they buy in now.
In casual conversation lately with a few, they know about as much about crypto as I do about how to cook a souffle (actually my eggs benedict is pretty good, not sure if that qualifies :p )
The way I see it, when there’s a slight tilt of a ship, all the loose stuff falls off the shelf, or tumbles off the deck into the sea. When the ship rights itself, all the stuff securely fastened stays exactly where it is.
That stuff falling off, that’s the ≈15% buyer fluctuation.
Then there is the likely upper 5% of the watchful hodlr’s. Those that may not quite have a stomach for ship sway in really rough weather, so tend to lean over the rail and expel what they could only hold onto so long.
Now we see the ≈20% buyer fluctuation.
Now let’s look at the rest.
See the distance between the two red lines, upper dotted and lower solid. I believe we are all anticipating another pretty heavy ship tilt, so that last category of watchful hodl’rs may wind up leaping for the rail before it happens.
So what does that leave?
All the sh#t you see locked down that never falls off a ship.
Like those who hold the majority of a market.
Thats the category of crypto in absolute lockdown. The seriously hard core. The rather small but mighty handful that have way, way too much at stake to dump. They pretty much own the majority of bitcoin, and we are likely to never see one coin of that dump on sentiment.
Now why would I be so assuming as to maybe offer myself for later reference to be a made of fool of by making such an assumption?
Ahhh, herein lies the answer. And my opening view about those who make markets, as opposed to those who simply play in them.
Yes, we know of Clay Christensen’s expertise on original disruption theory. But it’s his clarity on Disruption Innovation that many may tend to miss.
“It’s important to remember that disruption is a positive force. Disruptive innovations are not breakthrough technologies that make good products better; rather they are innovations that make products and services more accessible and affordable, thereby making them available to a much larger population.”
(emphasis is mine)
The players that right now hold the majority of BTC, also hold the key to not only its value, but the greater value on its basis. Its basis in creation by the notorious Satoshi Nakamoto (reported aka Jon Matonis) was not of one wealth on currency, but in the wealth of its impact to change society.
Crypto at its origin was simply created as a decentralized currency to connect the world.
If pure wealth was its intent, I don’t think buying 2 pizzas for 10,000 bitcoin would have made any sense whatsoever (long live May 22 Pizza Day!).
What did make sense, was make the ability to intersect humanity and exchange a value. A value no longer subject to vested interests serving to profit on the necessity of that exchange.
I believe, as do so many others, that this simple vision is what will truly connect society using blockchain technology. The backbone of bitcoin, and the spinal column of crypto.
I see blockchain as the magic fairy dust behind the success of holding a simple world-changing vision of crypto so firmly together.
In fact, what is actually and unfortunately lost on regulators, Jamie Dimon (who is now recanting), and so many other naysayers, is this vision and mission is proliferating daily, across the greatest and most powerfully impenetrable blockchain on earth — ourselves.
And that is also why I don’t see the above bottom 60% will ever need to relent in our pursuit of achieving true, disruptive innovation.
We’re here to stay.