One of the things I most enjoy about working in the crypto sector (apart from my awesome colleagues and the constant flow of fascinating change) is the level of debate.
I’m not being sarcastic – there are many takes I strongly disagree with, but when they are put forward by people with rational and inquisitive minds (which can be most of the time, depending on your Twitter filters), the engagement invariably ends up enriching my own opinion. And, sometimes, bouncing someone else’s conviction off yours opens your eyes to nuances you hadn’t seen. Who knows? Entertaining conflicting points might actually change minds.
Now, when you take two intelligent opinions that you don’t agree with, throw them together with yours and stir them up a bit, magic can do its uncomfortable thing. That happened to me this week.
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Many of you will already have seen Bloomberg commentator Joe Weisenthal’s list of six reasons why bitcoin has not had a great year. To recap, they were a lack of new highs, its new correlation with the S&P 500, disappointingly resilient fiat currencies and inflation levels, and a new competitor for the volatility trade in the form of stocks.
Of course, there were many reactions. One of the best responses I’ve seen was from Nathaniel Whittemore, who stressed the progress made in institutional uptake, growth in emerging market demand and bitcoin’s endurance. Another was from Messari’s Ryan Selkis, who objected to Joe’s interpretation of bitcoin narratives and timeframes. I expand on some of my objections further down.
A different angle
The other analysis I disagreed with this week was from JP Morgan, although their take was almost the opposite of Joe’s.
A report shared with the investment bank’s clients and seen by CoinDesk boldly stated that bitcoin has had a good year so far, highlighting that, even through the market turmoil in March, the cryptocurrency only briefly dipped below its cost of production. It also points out that liquidity in bitcoin markets was more resilient than in other more traditional markets. The analysis concludes that this points to a long and happy life for bitcoin, but more as a vehicle of speculation than as a store of value.
So, here we have Joe hinting that bitcoin has had a disappointing first half because it didn’t have spectacular price moves relative to other asset groups, and JP Morgan inferring that it’s had an unexpectedly good first half for the same reason.
In my opinion, they are both missing the point. But my disagreement with them changed my mind about something.
Both JP Morgan and Joe seem to assume that there is a clear…