Daily Ramble
Am I the only one who forgot the pleasure of turning crisp new pages in a book? My Kindle would be jealous of hearing me type these words, but let it be.
For Christmas this year, my Secret Santa got me two new books — you know, the things you can’t read with the lights out. I’ve managed to chew through the first one, The Bitcoin Billionaires, already and unregrettably. It’s a fascinating tale of the Winklevi Twins’ fall from grace during the beginnings of Facebook, only to be restored to glory for taking an early and massive bet on Bitcoin.
The author of the book, Ben Mezrich, is the same that authored Accidental Billionaires, the basis for the movie The Social Network. I’ve heard Ben on a couple of podcasts all but admit having railroaded the twins into the category of “privileged elite” while writing Accidental Billionaires, and in so doing, they were easily despised by the public after the movie’s release. As much as this is a tale of redemption for the Winklevi Twins, the “bad guys” in The Social Network, it’s as much a tale of redemption for Ben, who realized that not only had the Winklevi twins been screwed over by The Zuck, but his casting of the Winklevi was terribly off base.
A non-fiction page-turner is typically oxymoronic, but this fits the bill — at least for me being fascinated by the origins of Bitcoin as it continues its march towards separating money and state. And somehow, unwittingly, this became a book review when I meant it to be an ode to the joy of reading physical books. Darn. Let’s just roll with it though, huh?
Favorite Thing on the Interwebs Today
Let’s swap “favorite” for “amazed” on today’s Favorite Thing on the Interwebs Today. Is anyone else creeped out by what’s coming in the future?
Bitcoin Price Prediction
Yesterday: $25k - $28k
Today: $27k - $30k
Tomorrow: $27k - $30k
Bitcoin stayed safely in the predicted range of $25k - $28k yesterday and, indeed, the bulls did take their swing and make good on it, seeing price rise as high as $28.6k today before being rejected sharply. At the moment, it’s looking like the bulls want to take another crack at overcoming the $28k handle and if they do, we should exit the current range and leg up as high as $30k, the next big round number and psychological resistance. $30k-$36k is where I suspect we’ll see a more substantial pullback occur lasting between 2-8 weeks. These suspicions are based on the last macro bull cycle patterns for Bitcoin. Price movements like to rhyme, but not match so staying flexible here is key.
Bitcoin Ed Bite
Bitcoin’s monetary policy is deflationary. What that means is that every 4 years, the amount of new bitcoin coming to market is cut by 50%. It started off as 7,200 bitcoin each day, then in 2012 it became 3600 new bitcoin per day, then 1800 in 2016, and currently 900 in 2020.
All of us use fiat money in our day to day transactions and that is inflationary. That means more money is being created each year and increasing. Amazingly, 2020 saw the USD money supply increase by 26%, the fastest ever on record!
Since we’ve only lived under an inflationary monetary supply, we’re conditioned to think it’s normal for the price of goods to increase each year. Can you imagine if the price of your cup of coffee stayed the same for more than 6 months? Or even if it decreased?
We don’t have a ton of historical data to compare with since the manipulation of the US money supply started in the 1930s, but what data we do have shows that society thrived when money was deflating. It’s beyond the scope of this Ed Bite to drill into it, but this is a fantastic piece if you’d like some evidence from Pedro Febrero, another Portuguese Bitcoiner.
Thanks for reading,
Kent
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I LOVED the robots (only thing I missed seeing was hips moving laterally, like when you salsa) but I literally went thru my phone at first, trying to shut off my Pandora music that was broadcasting similar music cuz I dint catch onto what was happening there. Really clever?