Having a Faith: 15 Reflections on Bitcoin and Crypto Markets

Author:Meltem Demirors

Compiled by: Riley, ChainCacher

It all starts here. Everything we discussed when we started building Blockworks, the world’s first Bitcoin investment company, has come true ten years ago. So, why is the price of Bitcoin not a million dollars?

1. If we exclude Bitcoin and Ethereum, this is the situation in the crypto market over the past five years: the currency may have changed, but the overall data has not changed. This is a big problem – no growth.

2. The market in 2024 is mainly supported by two continuous buyers - MicroStrategy and BlackRock, but these buyers are not preachers, but mercenaries. Buyers of MSTR (MicroStrategy) are arbitrage convertible bonds, and buyers of IBIT (iShares Bitcoin ETF) are arbitrage base. Both hold 6% of the Bitcoin supply. This is our black swan event.

3. Despite the promise of innovation and the endless public chain publicity on Twitter, Bitcoin’s market dominance is rising, not falling.

There is only one Bitcoin industry, one Bitcoin story, and one Bitcoin market.

4. Let's take a look at Bitcoin. We have experienced many amazing rebounds driven by narrative and capital flows. But what kind of narrative or capital flow can push us to break through the high point of "the US government uses Bitcoin as a strategic reserve"?

5. While decentralized finance (DeFi) shows amazing potential, traditional finance (TradFi) is taking the lead in terms of revenue. It is expected that stablecoins and ETFs (exchange-traded funds) will bring US$9.1 billion in revenue to institutions in fiscal 2025. By contrast, the DeFi protocol is expected to generate $9 billion in revenue over the same period, but this figure depends largely on the transaction activity of Meme coins.

6. Institutional investors are pouring in! Yes, they see the opportunity to make money and they want to get a share of the pie. It has nothing to do with personal grudges - it's just business. For Trump, he came to DAS (Digital Asset Summit) because he could make a lot of money. It has nothing to do with personal grudges - it's just business.

They are mercenaries, not evangelists.

7. Institutional innovators who talk about cryptocurrencies on Twitter and frontline fighters who talk about Meme on Twitter have more in common than you think.

We need to stop worshiping and start thinking.

Stop stupidity. (By the way, this includes myself)

8. Do you know what is the most profound thing in cryptocurrency?

Proof of Work.

Bitcoin shows the world how to build energy-to-computing value chains and create $60 billion in public equity value.

9. I've said this many times: Bitcoin has accelerated the development of artificial intelligence for at least a decade. Bitcoin has created a new data center business model, including post-table custody, flexible load, demand response, and hedging with underlying assets. This is a profound change.

10. I have never expressed this point in public, but it is time to say it: Proof of Stake is a wrong decision. Ethereum could have evolved into a trillion-dollar protocol with a strong energy-to-computing ecosystem. The reality, however, is that the MEV (Maximum Extractable Value) mechanism has squeezed billions of dollars of value from users and applications.

11. Ethereum once led Nvidia's big gains, but now it cannot drive the market to rise.

12. We need to return to the basics. Many markets are at the moment of clearing, and cryptocurrencies are no exception. You cannot disobey the laws of physics. But where are we going from here?

13. Our redemption is: energy, computing, cryptocurrency.

It's that simple.

The rest of the story is slowly unfolding—it's our job.

14. Ten years ago, I believed in Bitcoin and put all my time and energy into it. A group of Internet madmen make global reserves of cryptocurrencies a reality through Meme. Imagine what else we can do.

It is important to have faith.