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The FUD Hunter's avatar

As always, great article. I work within the traditional finance sphere and have been buying Bitcoin for 2-3 years. I agree with your comments re: legality of the sector, which is why I sat on the sidelines for a number of years prior to buying.

I entered the sector as a trade around the Bitcoin halving cycle - aka my purpose was to buy Bitcoin legally, AML/KYC included, with legal US tender. And then the plan was to sell the Bitcoin at a higher price. The thesis played out, yet I am still adding. Here is why I remain involved.

First, a legal framework started to evolve throughout 2020; the OCC published a framework for banks to custody Bitcoin in July 2020. This was followed immediately by the “wall of institutional money”, which led to the frenzy of winter ‘20/’21. Legal/regulatory framework improved seemingly when it needed to. With an eye for these developments, and not laser eyes, I continue to hold and add opportunistically. Even before the Trudeau Rubicon was crossed, I was very aware that Bitcoin is far more trackable than traditional financial assets, given the multiples of rehypothecation that occur behind closed-doors in custody. Jeff Snider and Caitlin Long speak extensively about this, and we have seen into the belly of this beast with Lehman, MF Global, and others. I believe blockchain will disrupt the operations of every industry in time, and thus I am speculating the genesis protocol for this technology will increase in value over the long term, whether it be in the form of a currency or property.

Secondly, if you look at the construction of Bitcoin, from SHA-256 securing the network (developed by NSA), to the satellites and global computing network that allows for decentralized communication (developed by NASA), to the mysterious creator who has seemingly never moved any coins … I conclude that the chance that Bitcoin was invented, or blessed, by the US Government is not 0.0000%. Tracking technology was used to take down Silk Road in 2013. Rather than kill Bitcoin then, the IRS instead created a legal framework for taxing Bitcoin by 2014. Recently, US Space Force Engineer Jason Lowry has advocated for Bitcoin and described it as ‘military grade money’, though in no way asserted any US involvement. Even Gary Gensler has blessed Bitcoin given its genuinely decentralized evolution.

So say, hypothetically, there is a 1% chance an arm of the US Government was involved in the development of Bitcoin. With that stipulation, would your evaluation of the space be the same? You pointed out Dr. Hunt’s assessment that “The goal of the US Treasury is to see all of the money in the world”. Bitcoin is not money, its property; but its about as trackable as they come were it to be considered money sometime in the future. Accordingly, I have sized my position for this unknown.

Lastly, thinking about future, we don’t know what it holds. There very well could be a new government based on the desires of the constituency. Or who knows what else. The Strauss-Howe Generational Theory is playing out essentially to script. I concede that my journey in the space may have me thinking like a ‘maxi’; however, I find the tone of your pieces regarding crypto/Bitcoin to be more black & white than you’re other pieces. Typically, you explore a current situation and then build an assessment of the future which is directional, but dynamic. Yet your pieces involving Bitcoin read absolute, in my opinion. Curious to understand whether Doomberg views the space in a static light, or if the team is reevaluating the space as it matures. Given the years of experience in a vast array of fields represented by the Doomberg team, it surprises me that the unanimous view on this revolutionary technology can be so resolute.

In all sincerity, thank you again for the great work you publish and I hope my comments don’t read as combative. I’m at the point where I am trying to find ‘FUD’ that can’t be busted – so I invite any and all criticism of the sector. And I greatly respect the work your team & Mike Green have put out in the face of a vitriol laser-eyed army. Its commendable and I look forward to your coverage, both positive and negative.

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Anaximander's avatar

The world order is changing (crumbling) before our very eyes today, exposing the all-seeing Saurons as having no clothes as the tanks roll in, rhetoric and promises (even nuclear treaties) as hollow at their core, sanctions as futile, long-standing policies as having failed and succumbed to entropy as all human systems inevitably do -- instituting an era of tectonic change, historic geopolitical realignment, and increased degrees of uncertainty and chaos.

And yet on this very day Doom has chosen to write to us on the fatalistic inevitability of the same all-powerful technocrats to be able to dictate and control the daily, minute behavior of 8 billion people on the planet simultaneously. Regardless of the odiousness of this view, for it to even be possible it would require competence as a necessary condition, and anyone with two eyes can see for themselves today that such competence is in very short supply. Anyone who is too afraid of what is coming can buy their respective sovereign bonds and fatalistically allow the same Saurons to softly default on them on the order of -3-5% or so a year.

What is happening today is a lesson in real economic power, a lesson Wall Street has shorted for decades and has no fundamental understanding of. At the end of the day, the Boomers and prior generations that have led the world into this historic debt default, and the decline of an empire and a world order, need the young people to actually do the work, pay the taxes, fight the wars, and effectively bail out all of their bankrupt programs and assets. The real economic power lies with the young. They need only to seize it.

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