Inflation concerns ticked higher as 2021 shuffled from the second quarter to the third. And after rising to new highs in April, bitcoin has largely since shed value.
So much for bitcoin being an inflation hedge.
Then in recent days reports discussing Amazon’s potential acceptance of bitcoin and use of other cryptocurrencies cropped up. And up went the price of bitcoin.
The two episodes have helped me better understand precisely what bitcoin is. It’s simply a speculative asset that banks on future hype regarding acceptance, use, and favor for price gains.
Of course, that’s most speculative assets, right? Sure, but that’s the point. Bitcoin doesn’t seem to be incredibly different from other high-vol assets, except for having a history of even greater-than-average vol. It’s like an asset-ier asset. Or a more speculative speculative asset.
That means that bitcoin will always be fun to watch, and fun for other to trade with. But it doesn’t mean that bitcoin is going to be the Internet’s currency. I think that that place in the market will be reserved for some constellation of stabelcoins tied to fiat currencies, and a few major blockchains that prove themselves to be the best hosts for developer activity.
This makes me more bullish on the Solana and Ethereum chains to create something of more value than the simple asset-ness of bitcoin. They are platforms that, based on the data I can find thus far, developers are betting the future of the cryptoeconomy on. Cool.
I suppose I find the developers more interested in building newer, faster, better chains far more interesting than the bitcoin maximalists who think that every new crypto innovation can be shoved backwards into the OG coin’s chain. That’s just boomers wanting to preserve upside at the cost of innovation. Who needs it.