The intention, timing and context of a purchase tells us more about an asset than the official narrative of its most devoted promoters.. In the specific case of Bitcoin, it is best to perform a study of price action as it interacts with the average investor. The most confusing thing is looking for “wisdom” on social networks. Because, in this space, the gap between what is said and what is done is large. The narrative (loaded with idiosyncrasies) moves in one direction. But the market, curiously, moves in another.
The militant bitcoiner represents the loudest section of the community. Certainly, they have dominance of the narrative in the niche press, on Twitter and on YouTube. This batch is made up primarily of libertarians, anarcho-capitalists, conservatives, and new converts (children of propaganda). This batch has been educated (financially) by social media. Where do ideas come from? The cypherpunksthe gold beetles, Chicago School, Austrian School, classical liberalism, tea partyetc.
In a polarized and fragmented society, the individual seeks belonging in the small tribe of equals. In this new reality, truth is a choice. I believe in this. I believe in that. It’s my truth against your truth. It’s my tribe against your tribe. In many ways, we are returning to obscurantism. It’s about vtruths by decree. The truth of the tribe becomes the truth of the universe.
Each tribe has its own experts, its own beliefs, and its own evidence. What happens if a Nobel prize winner in economics attacks Bitcoin? Well, the same as when an astrophysicist attacks flat earthers. A dynamic of them against us is formed. And then comes the conspiracy theory. Blah, blah, blah… The debate becomes totally irrational. And the personal attacks begin. “Economists are idiots” Ah, but the ignorant young man after watching a couple of documentaries on YouTube is a genius. If you believe in Bitcoin you are a genius, otherwise you are a brute or an evil schemer.
This anti-expert, anti-scientific, dogma-laden sentiment hinders rational conversation. The confident ignorance of amateurthe opportunism of influencersthe greed of the businessman, the bias of the journalist and the fanaticism of the militant conspire to foster sectarian thinking.
Then, we have an individualist, anti-statist and conservative sector with a reactionary proposal rebelling against a relatively liberal, progressive and “Keynesian” system. Therefore, basically, we are talking about a countercultural/oppositional movement. Here’s the detail. The opposition is always “right” from the stands. After all, utopia is perfect (on paper). And whoever criticizes the system is always right, because his statements are hypothetical. Or, put another way, according to one militant bitcoiner, Bitcoin is the salvation of the world. As simple as that. The current system (corrupt, inefficient, and oppressive) must give way to the libertarian utopia.
Bitcoin is said to go up in price due to “adoption”. And this adoption will be, in essence, idiosyncratic. In epiphany style, sooner or later the masses will recognize Bitcoin’s unquestioned superiority as money. Let’s say that it will be a kind of (voluntary) monetary insurrection that seeks the separation between the economy and the State. So this adoption is a referendum against the established system (private banking, central banks, fiat). Scarcity, free markets, non-regulation and decentralization remind us of the 19th century. In fact, it is a reactionary and conservative movement. What you want is to go back to the past. A retrofuture.
Now, let’s talk about the average bitcoiner. This non-idiosyncratic bitcoiner belongs to a silent majority. He is not as loud as the militant. But, due to their large numbers, their effect on price action is key. Here the intention is to make money. Bitcoin represents an opportunity to grow financially. In this case, Bitcoin is a speculative asset. Buy today to sell tomorrow. Suddenly, this bitcoiner can get a bit infected with the fanaticism of social networks. ButIn general terms, we are talking about an opportunistic, pragmatic and speculative buyer.
In this case, in order to be successful as an investor, you have to be as objective as possible. What is sought is not to reform the system. What is sought is to understand the situation in order to make the best decisions. What are the best decisions? The best decisions are those that give the highest possible profit. As simple as that.
The average bitcoiner is a social and physical being. That is, they live in a social environment of limited resources and various needs. That character has income and expenses in a real world. That is to say, its ability to invest in speculative assets (such as Bitcoin) is not the same in all contexts. Thus, Demand is inevitably variable due to different conditions. Inflation? Recession? stagflation? Uncertainty?
People in real life have bills to pay. They have mortgages, children, debts, summer vacations, health problems… If the cost of credit increases, that implies that the most prudent thing to do is to reduce spending. If inflation becomes very toxic, that implies that the salary is not enough as before. All these factors influence the demand for speculative assets.
In this case, “risk” means “financial risk”. It refers to the volatility of the price. Then, For a person with debts, commitments and obligations (in dollars), exposing yourself to the fluctuations in the price of Bitcoin at a time as delicate as the current one is a decision that cannot be taken lightly.. The militant always reminds us that Bitcoin is a long-term investment. In addition, he also points out that the price of Bitcoin in the short term does not seem to matter. However, not all of us can afford to wait.
Suppose a person X puts all his savings in BTC. Then the price drops by 70%, and at that point, a family emergency arises. Bills must be paid in dollars and creditors do not give consideration. Or, put another way, for practical purposes, that money was lost in a risky position. The willingness to risk is closely related to liquidity in the system. Thus, the macroeconomic situation has a fundamental influence on the demand for Bitcoin. Consequently, macroeconomic analysis is essential when formulating price forecasts.. Here ideology hinders. Like that or more clear?
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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