Bitcoin isn't populist
Read to the end for an absolutely outrageous chocolate video
Why Can’t The Line Just Go Back Up?
The last “crypto winter” was in 2018. Per Coindesk, Bitcoin’s value dropped almost 90% and really didn’t properly recover until the massive rally that started in 2020. Now, as of this week, Bitcoin is currently hovering around $30,000, which is down about 50% from where it was last November, its all-time high. All of this is causing many to wonder if we’re entering another crypto winter. It’s causing many more to wonder if this is the beginning of the crash that ends the whole thing. Scott Minerd, the global chief investment officer for Guggenheim Partners, a global investment firm, told CNBC today that he thinks Bitcoin could drop even further, down to $8,000. Which I suppose is possible, though that also seems pretty catastrophic.
While nothing is “too big to fail,” in the two years since the last crypto winter, cryptocurrency has, for better or much, much worse, entered the mainstream. Capital market company PitchBook Data estimates that $30 billion worth of venture capital was invested in cryptocurrency in 2021. And Samuel Bankman-Fried, a prominent crypto billionaire, donated $16 million into super PACs in just April of this year. I get the joyous knee-jerk excitement every time the crypto markets take a tumble, but I’m not so sure this is quite the end. (This is not financial advice, etc.)
Though, it does seem clear that things are souring in every corner of the crypto space. Gen Z’s blockchain-based summer of love is over and now there are Web3 Altamonts everywhere you look. The question though is why? If crypto is magic internet money and everyone wants it to go up, why can’t it just… go up?
This week, a statistic about Bitcoin that’s been kicking around for a while went viral on Twitter thanks to the labor rights-focused media organization More Perfect Union: “.01% of bitcoin holders hold 27% of all Bitcoin.” The figure comes from a 2021 study by the National Bureau of Economic Research, which was reported on by Bloomberg. Glassnode, a blockchain insights research firm, dug into that and found that, yes, Bitcoin whales and large institutions do control about a third of the market, but about 25% of the market is controlled by retailer investors — or entities who hold up to 50 Bitcoins at most. Which is actually kind of more interesting. Because it sort of confirms that Bitcoin, in particular, is not populist, but feudal.
There are just as many coins in the pockets of the little guys as there are being hoarded by the .01%. But, of course, it takes much less effort from .01% to pump and dump the Bitcoin market than it does for the retail investors to organize their own GameStop-esque pump. I mean, look at a yearly chart for Bitcoin’s price and explain to me how this isn’t just institutions cashing in before quarterly earnings reports are due.
You can almost imagine a real financial populist revolt happening with Bitcoin. An internet money free from institutional regulation, driven by hype and memes. But, based on my interviews at Bitcoin 2022 in Miami last month, I don’t get the sense that anyone in the Bitcoin community actually wants that. They want the feudalism. They want to be the early adopters hoarding gold and paying serfs with it in the future. My personal theory is that post-GameStop pump, a lot retail crypto investors fundamentally didn’t understand this. And many Bitcoin evangelists were happy to not explain it to them and take their money.
Last winter, as Reddit’s r/wallstreetbets was wrecking havoc on the world of traditional finance, a lot of casual investors thought they could then move over into crypto to try and replicate the same kind of economic populism they were able to organize with shares of GameStop and AMC. And with this came an entirely new culture of crypto, based on the fundamentally incorrect belief that you can use cryptocurrency to meme yourself into a millionaire. But what is now clear from looking at market data was that Bitcoin — and by extension, the whole crypto market — was already in a pump that had started in September 2020. By March 2021, its price had increased by almost 500%. The GameStop pumpers, and the NFT bros and the warm-and-fuzzy Silicon Valley Web3 dumb-dumbs that followed, got in late and, ultimately got played. And now that all of their 2021 gains have been obliterated, they’re going to have to wait and see if they can survive the winter.
Looking for something fun to do in Brooklyn this week? I’m performing at Littlefield on May 26th with some extremely cool people, such as Dylan Adler, Jake Flores, Ashley Reese, and Bridget Todd. Also, this is the last live show I have on the books for New York City probably until the fall!!! Click here to pick up tickets!
A Good Tweet
This was dropped in the Garbage Day Discord by JRo and I don’t like it one bit.
As the world waits to see exactly how this most recent crypto dip shakes out, it does feel like every day there’s a new piece of viral content that comes across my timeline that makes me say, “uh oh!” For instance, here’s a truly alarming TikTok video from February:
If you don’t want to watch the video (I wouldn’t recommend it), the premise is that you can pay the mortgage for a million dollar home by loaning out your cryptocurrency to a service called the Anchor protocol that, earlier this year, was offering almost 20% interest.
Fun fact: the Anchor protocol was actually central to the Luna crash this month. Another fun fact: This video now conspicuously does not seem to be on TikTok anymore. It was created by Matt Lorion, an 18-year-old gaming YouTuber turned investment influencer, and his most recent videos are about how the market is crashing and self-help content for teens trying to quit vaping.
What’s Going On In Sioux Falls?
Twitter user @TheBigAndSexy70 got the mayor of Sioux Falls, South Dakota, to agree over the weekend to go with him to Dave And Busters if he got 5,000 followers on Twitter. This kicked off a campaign to get @TheBigAndSexy70 up to the follower count he needed for the big Dave And Busters blow out and I’m excited to say he reached it. @TheBigAndSexy70 put out a very fun video celebrating the milestone yesterday. And Sioux Falls Mayor Paul TenHaken seems to be taking this pretty seriously. He tweeted this morning, “we are going to have a party the likes of which Sioux Falls has never seen.”
What’s Going On In The Morbius Discord Server?
There’s an official Morbius Discord. It’s out of control. It’s full of people just saying the word “Morbius” over and over again. It also has a refreshingly open attitude towards trans rights, which is nice. It’s a verified channel, so I guess that means that someone involved with the movie is running it. The mod is named “MORBIUS ADMIN” and I’d like to pretend it’s either literally Jared Leto or just some very confused production assistant.
Apparently, though, there is one big problem with the Discord. I’ve seen a lot of reports on Twitter and references in the chat to users getting banned from Discord for DMing each other full pirated copies of the movie, which is probably not what Sony wanted from this fun social media experiment lol. If you want to check it out, here’s a link that should still work.
This Goes So Hard
This was dropped in the Garbage Day Discord by alittler. I’m not sure how, but the instrumental from Blink-182’s “Dammit” somehow gives Tom Jones’ voice a weirdly emotional quality to it? Or does Tom Jones give Blink-182’s instrumentals more weight? I can’t figure it out! But it’s perfect either way.
These Recipes Are Bad On Purpose
Enable 3rd party cookies or use another browser
I’ve seen a few of these videos leave their TikTok containment unit recently and really piss people off on Twitter, so I wanted to clear things up. This is a TikTok channel called @scubeskitchen and the whole point is that the recipes are wrong. He takes a popular dish from a different country, usually pronounces its name wrong, and then proceeds to make something else entirely. He did one for Ireland where he just dumped a Guinness on top of a potato.
I’m not saying these are particularly funny or good, I’m just saying that the whole point is that they’re wrong. So if you get baited by them, well, that’s your choice. I googled the guy behind the channel, Steve Shainman, and I don’t think he’s a chef either. Last year, he started making genuinely nice looking sandwiches on TikTok, but wasn’t getting a ton of attention, so he pivoted to terrible-on-purpose food hacks and never looked back. That’s life in the algorithm, baby!
A Good Look At The Actual Metaverse
Been meaning to drop this in a Garbage Day! If you don’t follow People Make Games, you absolutely should. It’s a great YouTube channel and their newest video about VRChat and the metaverse is great.
4chan’s /co/ Is In A Spiral
Right, so, here’s the deal. 4chan has a board called /co/, it’s for comics and cartoons. It’s one of the older communities on the site and I’d estimate about 60% of the content there is about being horny for various cartoon characters. One of the characters the board has worshipped for the longest is Gadget Hackwrench from Rescue Rangers. Basically, for as long as you’ve been able to share images on the internet, men have used that functionality to trade pornography of Gadget Hackwrench. It’s a thing.
I have not seen the movie yet, but, apparently, Gadget makes an appearance in the new Chip 'n Dale: Rescue Rangers movie. (Which I hear is good!) In the movie, Gadget marries Zipper, the bug from Rescue Rangers, and they have like 40 bug-mouse(?) hybrid babies.
This has sent 4chan users over the edge. I’ve seen a lot of posts about being bug-cucked by Zipper. It’s a mess. I guess most 4chan users shipped Gadget with Chip? If you don’t want to actually go over to the site and read the posts there, here’s a link to some screenshots (NSFW).
Some Stray Links
“The Liberal Obsession With ‘Disinformation’ Is Not Helping”
P.S. here’s an absolutely outrageous chocolate video.
***Any typos in this email are on purpose actually***
You make a couple of assumptions:
1. Bitcoin is useful to people because its nominal value rises.
2. Exchanges who custody Bitcoin *own* that Bitcoin.
If people were solely purchasing Bitcoin for nominal increases in price, as a pure speculative asset, it would be true that all they seek is to hold wealth over later adopters. Whether you accept it or not, the narrative is that they are both getting in on a novel asset in price discovery, and, all importantly, that the asset has store of value guarantees not available elsewhere.
Without this foundation, Bitcoin would be pure speculation, but even if price discovery were finished and the fair value of Bitcoin accurately appraised (no more 'mooning'), there would still be reason to purchase it - it's the same reasons people purchased stocks, real estate, and Pokemon Cards after interested rates tanked; Bitcoin is the superior version of what those purchases sought. No fantasies of feudalism required, but if people want to risk getting in early they can pay the price and reap the benefits - we are still early.
Secondly the figure on ownership is slightly misleading. During the last massive price run-up about 2.5 million Bitcoin, 10% of the supply was held by exchanges. Much of that is actually owned by users of the exchange, if not custodied by them. Exchanges will certainly use their supply to accumulate, but there is at least a large group of frozen holders not susceptible to it - the counter-play is to not play the trading game.