Bitcoin’s collapse continues…

The Bitcoin collapse continues, plunging to $80k–a nearly 38% decline from the highs. As I am fond of saying, it looks like I was right again.

This guy’s tweet echoes what I have been saying:

This is what I have been saying all along. Readers of my blog (all few of you) who heeded this advice profited by shorting, or sold at a much higher price.

1. No Bitcoin reserve. Instead, only an unfunded stockpile. Also, no follow-up or status reports about progress on the reserve, or Bitcoin in general. It’s as if Trump won’t touch Bitcoin with a 10-foot pole–and justifiably so–as I also noted month ago in my precient almonds post. He already got donors’ money, so why does he need to deliver? Moreover, he’s a lame duck anyway, so he doesn’t need their help anymore.

I was debating some people last year on /r/buttcoin and they were certain Trump would bend over backwards for Bitcoin donors. I was like, “You’re not cynical enough about Trump or politics.” Of course, a lot of his net worth is tied in various cryptocurrencies, but he acquired them for nothing, so anything above $0 is profit, unlike the public who have massive losses. Trump is savvy enough to not use his own money. He rode the crypto hype to billions of dollars of unrealized profits for himself and his sons.

Trump’s objective is to hand off a win for Vance, not bailout a tiny crypto donor elite. Similar to Russiagate, he’s going to be busy for the next 3 years fending off allegations of associating with a pedophile-—a Bitcoin reserve is the least of his priorities.

2. Whales unloading, such as a 2011 holder who sold $1.3 billion of Bitcoin. As I noted, fewer Bitcoin are lost than assumed.

3. It’s clear the awaited bubble that burst was crypto, not AI. All capital going to AI. Cryptocurrency irrelevant to the broader economy. AI is the future, as indicated by Nivida’s blowout earnings report, and Trump knows this. Crypto ain’t it.

Yes, the broader market is also falling, but crypto has fallen much more, and on days when the market is up. The notable performance divergence between Bitcoin and the QQQ suggests more than just profit taking, but rather a macro shift away from crypto and into AI and other tech sectors, and also made worse by inaction on the Bitcoin reserve. So combine all these factors and you have a huge crash that keeps getting worse.

This also ties in with IQ yet again. Average-IQ crypto speculators predictably got hosed, falling for the false hope of a Bitcoin reserve, or delusions of crypto being comparable to AI. Smarter people such as myself and the Twitter user above saw the writing on the wall and profited big by shorting, or at least know the game is rigged and don’t play. Second, the appeal or allure of crypto is it offers an opportunity for average-IQ people a shot at wealth–so-called ‘lottery systems of wealth‘–without needing skills or expertise correlated with high IQ, or a college degree. These are also the people most vulnerable to buying at the top or being misled by seductive narratives.

The crypto collapse also reaffirms how there are few good alternatives to the ‘tried and true’ paths to wealth–those being careers, homeownership, and investing in ‘safe and boring’ index funds. Despite viral stories of student loan debt, college grads unable to find jobs, or college admittees who cannot do algebra, it’s hard to beat the college-to-career route for wealth creation, as the alternatives are still much worse.

Entrepreneurship and speculation are overrated due to high failure rates, or when the scheme suddenly collapses, like with crypto now. With entrepreneurship , there are a few winners and lots of losers. The mean is inflated by the outliers, but the median is zero, whereas the median college degree holder–especially in economics or STEM with a white-collar job–earns much more and with much less risk. Average-IQ people who think they will get rich with these college alternatives or hustles–be it crypto speculation or reselling shoes on Amazon–will be left holding the bag, sometimes literally, like with reselling apparel.

There is not enough money in the world, if money is to mean anything, for everyone to be a ‘crypto millionaire’. Or bipedal sentients in the ‘multiverse’ under the most optimistic interpretation of the Drake equation, for everyone to get rich reselling shoes. In either case, there is no net value creation–but only hoping to buy high and sell higher–and finding out too late that there is no one left to sell to.