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- [Re-sent] SM (ed17) Co-opted by Wall Street – Bitcoin’s Biggest Risk?
[Re-sent] SM (ed17) Co-opted by Wall Street – Bitcoin’s Biggest Risk?
SM (ed17) Co-opted by Wall Street – Bitcoin’s Biggest Risk?
Friends and associates,
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The macro world took some steam out of bitcoin in November. Crypto investors may have shifted capital away from trad-fi, but trad-fi liquidity flows will remain critical in the quarters ahead. A stronger USD and flatter yield curve tell a cautionary tail as we edge deeper into the bitcoin bull-market.
Market review TDLR:
Bitcoin fundamentals remain strong and trad-fi risks are unlikely to dominate immediately, but do not get complacent.
I am often accused on being a bitcoin evangelist with nothing negative to say. Well, here is a risk that most people do not think about… Being co-opted by Wall St.
Bitcoin’s potential is immense – an independent global reserve asset, the foundation of a more ethical financial system, uncorrupted by centralized financial overlords. But what is the risk that bitcoin could become co-opted and corrupted by those centralized financial overlords? What if bitcoin loses its independence? What if bitcoin merely becomes another speculative Wall Street plaything?
TLDR: Wall Street’s growing importance is unavoidable as bitcoin goes mainstream, but correlations will not rise indefinitely and bitcoin’s independence remains in the hands of everyday users like me and you.
Conclusions
Bitcoin’s rising correlation with the S&P500 is a concern but not the end of the world
All correlations could rise as central banks dominate
Bitcoin is susceptible to global market weakness – do not get complacent
Evidence suggests grass roots bitcoiners remain important vs. Wall St.
Long-term holders dominate, and small holders are also growing
Independence and privacy are important – the tools are in your hands
This is the last note for this year so I want to take the time to thank you for 2021. I wish you a splendid time with family and friends over the festive season. I hope it is enriching and rejuvenating, setting you up for a strong 2022. My wife and I will be in Austin Texas this year. If you are in the area or have recommendations, give me a shout.
Disclaimer
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