This is an excerpt from the “Bitcoin Magazine Podcast” hosted by P and Q. In this episode, Vijay Boyapati joins us to talk about “Bitcoin’s bull case” and where the bear market pays off for true belief. .
Listen to the episode here:
Vijay Boyapati: I think we are in a bear market. I think you called the bear market. I think it was a little early, but I think I called sometime in June or July. I thought the bear market had started. It would be no exaggeration to say that 2021 started a little late.
I think what we’re seeing is a combination of both Bitcoin’s natural cycle and the macroeconomic conditions we’ve seen in these bear markets before. It explains why you feel pain. I don’t think this one—it doesn’t feel that long.
I have been following Bitcoin since 2011. The longest bear market in my memory was from 2013 to early 2017. I thought it was and still is the most painful Bitcoin bear market. “Wow, this may not come back.” I felt like a cricket during bear markets. I wasn’t interested in Bitcoin. Some of the loudest voices in the community have stopped ranting. Mike Hahn was a highly respected developer at the time, but he’s gone completely. He wrote an article in the New York Times stating: i’m not interested in that. I got out
There was little interest anywhere. People weren’t talking about Bitcoin. it was not written. It was a really tough time for those who believed in Bitcoin. I think this is actually very different. I think Bitcoin is now fully established as a macro-asset. Reduced price, yes. It’s down to 20,000, but if someone told you three or four years ago that Bitcoin was going to crash to $19,000/$20,000, you’d be like this. very! we made it!
This illustrates one aspect of money that people don’t really understand: path dependence. Gold and Bitcoin are financial assets, so money cannot be valued based on cash flow. They don’t generate cash flow. They are valued by a market process that people try to determine — this is a game-theoretic process — is this money better than all the other money out there? Better than gold? better than dollars? better than silver? Is it better than Ethereum and all the competitors out there? The point I’m trying to make about monetary assets is that they have no cash flow. So you need to measure your value as a monetary asset against other competitors and along attributes that make good money.
what are those attributes? They are visibility, portability, contagiousness (how easy it is to spread), and most importantly rarity. In keeping with this one key attribute that all money needs, Bitcoin is the best form of money that has ever existed. This has not changed. The fundamental aspects of money that make Bitcoin great, or what I think are the best, haven’t changed. It’s just the market going through a cycle of people trying to figure out what it is and people getting too excited and losing hope.
Each of these cycles is defined by a group of people. In the first cycle, the groups of people were very small. Bitcoin was only understood by cypherpunks, computer scientists, and hardcore libertarians. It was a very small circle of people, but it’s been through a cycle that’s actually brought in a lot more retail investors because that circle keeps getting bigger and bigger, but there are more retail investors. There are also many institutions. There were more nations out there, and many of them got a taste of Bitcoin. He in the portfolio may have bought 1% or $100 and given up on bitcoin, but these guys are ready to come back next cycle.
Let me give you an example. Stanley Druckenmiller is a very famous macro investor billionaire. [He’s] Invested in macro bets very successfully over a very long period of time. He owned bitcoin this last cycle, but most recently I heard him say he doesn’t own bitcoin. As bad as it sounds, he’s giving up Bitcoin. he is mentally trapped. He’s always going to pay attention to the price of bitcoin and he’ll be paying attention when bitcoin starts and when it comes back slowly but surely as it always does in every cycle he will say “I’m stuck around $20,000” or whatever it is, wherever you find a plateau. $23,000, $24,000, $25,000, maybe $30,000. People like him will come back because they have been exposed to Bitcoin and trapped mentally. They’ve heard enough about it, invested a little bit in it, and have enough touch points to come back.
This is the same thing that happens every cycle. The same thing happened to him in 2017. Bitcoin he bought at $19,000 or he at $20,000 and a lot of people got burned when it dropped to $3,000. why did i do that “It was a terrible investment,” they said, but they were looking at the current cycle, but it ended and they came back because they noticed Bitcoin. They knew how to invest. They were ready to put in more capital. [amount of] The people ready to participate are much larger. The number of people ready to enter the next cycle, especially institutions and high net worth individuals, is huge. I think some of the things we saw made people over-excited. They saw Michael Thaler coming, they saw El Salvador, and they thought this was the cycle to get every rich individual, every corporation, every nation-state. They all add up.
In fact, I think what you got is just a small sample of what we’ll see in the next cycle. I never thought a nation-state would do what El Salvador did for several cycles into the future. I won’t do anything, but I think in the coming cycles more people will come and do what El Salvador did. Therefore, I think there are many reasons to be bullish about Bitcoin. None of the fundamentals have changed, nor have the attributes that make Bitcoin superior to all its competitors.
The number of people exposed to Bitcoin is much higher. If you’ve been there for a while or listen to people who’ve been around for a while, what you have is an incredible opportunity. Now is the perfect time to Now is the perfect time to gain exposure to learn more about Bitcoin, do something for Bitcoin, and build a business in the Bitcoin space. The people around us today who are building businesses, investing and learning about Bitcoin are the most successful people in the next cycle.
What you don’t want to be and what always lets me down are the people I talk to, friends and family. They are only interested in the end of the cycle.The same from cycle to cycle. I have experienced 4 of them now. People come to me at the end of the cycle and say, “Tell me about Bitcoin. How can I invest in Bitcoin?”
I said, “I’m really glad you’re interested in Bitcoin. Be careful because Bitcoin is cyclical. It goes through cycles. Learn about investing in Bitcoin. There Put in a small part of your portfolio.” I usually think about it because they are really unprepared. They’ll come back on the next cycle and get a little burn. I will make sure I never come back because I don’t want to get burned. But if you are there now and listening, there is a great opportunity. They don’t come around very often. Once every four years.
Ultimately, these cycles will stop once Bitcoin is fully adopted. And I think we’re probably only 3-4 cycles away from that. I think now is the perfect time to get interested in Bitcoin. The basics haven’t changed, so go and learn.
Get out there and invest. Get out there and build it. Now is the time.