Learning with Lisa Tan
YouTube video link:
Macro crypto narratives and investing via first principles, with Jordi Alexander
He started believing that there needed to be more competition to the dollar (crypto as a stored value)
There is gold, but there are disadvantages to gold. For example, you can’t transfer it, the governments owe most of it, they can control supply as much as they want, there is no transparency (not recorded in a ledge)
So bitcoin has all these advantages. Once in the 5000-year thing where you kinda move out of gold. Gold is a very boring asset now. It no longer plays the role which we need it to play, which is we need something to counterbalance currency debasement.
The only issue with bitcoin is the distribution, which is the most important thing for anything which is trying to be a store of value. Ultimately you need something which reflects real-world inequality. This is why I never believed Dogecoin’s thesis, it’s because you can’t have someone owning 20% of the supply
Dogecoin – showcases the network effect. The youth community pitched in and created this meme.
Liquidity game – those in crypto is not aware of how much a liquidity game crypto is. and that is likely to change next year when liquidity conditions change.
Qn: Why does he forecast liquidity conditions changing?
One week, it’s only LUNA going up. Next week it’s only Fantom. On average though, everything has gone up.
Less liquid froth for ppl to gamble with (so we’ll see less Shib + Doge)
The idea of underlying value – companies who have a growth path/ who actually make money/ create things who have utility
Why does that not happen? Do you think everything will come home? So what is happening right now – so when everything goes down, everything goes down. When everything goes up, the dumb stuff goes up faster.
When everything goes up, the dumb stuff goes up faster. What changes, what creates a shift in the narrative?
So when things are really pumping – human nature, people don’t want Bitcoin, they want the ultra meme coin which can go to a thousand X. But that changes in a bear market. You will see these dogecoin charts. The up is fast, but the down is slow. It’s this slow death, where people slowly capitulate.
So it’s in a bear market, where people will start actually caring about what makes sense.
Qn: so in a bear market, why would you ever hold Bitcoin or shitcoins? Where the value is going down.
A: So it’s actually kinda sad for me to say as a Bitcoin believer, but in a bear market, you should be holding dollars when the fan is about to blow. BTC will go down too.
You can buy BTC first, it’ll be the first thing to come back up. We saw this in March 2020, gold just got destroyed for a few days. Ultimately people just need cash. So temporarily BTC will go down. I don’t think down to the 30k level but we may see 40k for sure.
Qn: so why would you ever hold BTC? If in a bull market, it’s outperformed by shitcoins, and in a bear market, it’s outperformed by dollars.
A: there is a sweet spot. Crypto is a lot about narratives. Providence – BTC being the first. No argument for anything else. BTC has changed, now being treated more as an institutional asset.
Also topic of inequality in crypto – a lot of inequality in crypto. whales are playing a lot smarter games. There should be a backlash to that.
Qn: Doesn’t bitcoin incentivise people to hoard their wealth. And not being productive with their wealth like investing in new businesses or society. And therefore reducing future wealth.
A: that is absolutely true. BTC will have to change. There will have to be some proposal for inflation, something in line w wealth growing in the world. Otherwise, you will have hoarding. The reason is prices will keep going down in BTC so people would not want to spend it. This reduces productive economic activity, if we’re not trading, we’re not realising the value we could provide to each other. It is flawed, particularly the endgame.
Gold doesn’t have this problem, as they discover a bit of gold every year so there is a little constant inflation to the price. If it’s going to be money. There has to be some transaction, you can’t just leave it there.
It’s a good response to the government’s irresponsible money printing.