On Friday I attended the Princeton Crypto Meetup.
It was basically a Panel discussion.
One of the more vocal and interesting panel member was Henry Weingarten who manages the Astrologers fund.
Henry has some very interesting convictions and predictions about bitcoin and its price. Here they are if I remember them correctly:
- Bitcoin has no fundamental value and can only be analyzed technically
- The volatility of bitcoin and cryptocurrency is crazy and like nothing we have ever seen before
- Bitcoin is first generation technology and inferior to other generation 2 and 3 blockchains or coins
- Because bitcoin has no value and will go to 0
- If I remember his prediction correctly he thinks bitcoin will rise in April and then crash in the summer below 5k, with a target of 4500. I believe the date is June 4. (it could be July).
First off all I want to say that I was very impressed with his arguments and genuine believe that he is very capable from his interaction in the panel. I also find the prospect of bitcoin below 5k in the summer quite possible.
That said I want to go into these statements in detail. Starting with the one that I believe is the most true.
Bitcoin is first generation technology and inferior to other generation 2 and 3 blockchains and coins
I do agree with this statement. There is no argument to be made here. The tech of btc is the first generation and has many architectural artifacts that will be hard to overcome relative to other blockchains. Ethereum would be a 2nd generation and Steem and Cardano a 3nd generation. Maybe EOS is a 3rd or 4th generation blockchain, we will see.
Bitcoin has no fundamental value and can only be analyzed technically
This argument by him is something, where with all due respect, I simply believe Mr. Weinstein has not looked closely and been lazy analytically. To me this statement is clearly an illogical argument.
If I understand him correctly one of the reason why bitcoin has no clear value is because of the technological inferiority. While I agree with that, technology alone is only part of the picture. What most people fail to see is what a comprehensive thing bitcoin is. It changes and incorporates everything, but we tend to think in categories and patterns that we are used to, especially when we have a more developed neuro network in our brain (i.e. are smart and older). As such most people tend to take a quick glance at bitcoin and come to conclusion that fit existing patterns and how we operate in the world.
The problem is bitcoin creates a new reality, where old patterns do not apply quite so simply. Bitcoin can very well be fundamentally analyzed. Just not like you analyze stocks or other financial assets that Wall Street is used to. I don't want to explain how in this post, just state that I think Henry has probably not looked closely enough to understand what bitcoin is.
So if you don't understand its value, I'd suggest you look a bit closer and figure out why it has value or why it cannot have value.
Back to the technological inferiority argument, I think there are many other parts that are just as important, such as the network effect, the brand, infrastructure etc. Additionally we are at a state where the technology is good enough and what is missing will be delivered in future releases. The thing is adding technology tends to be easier than adding all the other stuff. It would be easy to copy Facebook technically, but it will be impossible to compete with it due to all the non technical things facebook has going for it (network effect, brand, users, data, integration with others, infrastructure etc).
Because bitcoin has no value it will go to 0
So since I do believe it has value, I do not believe in this either. I still hold lots of bitcoin relative to my other cryptos. However I do believe his statement can be correct, if a competitor will actually take over bitcoins market cap. I believe this could cause a flipping that would play probably faster than many bitcoin bulls can imagine. So this is a possibility just like everything bitcoin will likely not exist forever, yet right now it clearly is the boss of crypto.
Bitcoin will rise in April and then crash in the summer below 5k
This is another statement where Henry can very well be right. I also see the possible that we are in a bear market for bitcoin right now. I am not sure that we are but many things this year look like 2014 to me which was my 2nd bitcoin bubble.
Summary
I think it is very important to learn from people like Henry, since they clearly bring a skill to the table and many parts of their analysis may be correct. That said instead following such experts blindly, I like to try to learn which perspective they can show me that I have not seen myself.
What I find very interesting in this space is how many experts we see on TV and on Panels that actually do not understand the very basics of bitcoin and blockchains. And even most experts that do know what they are talking about often miss key aspects that are not of their expertise to form my own analysis.
Another example of such would be the more technical experts, that can code blockchains but often miss the bigger economic picture or fail to make money with it. Folks that have comprehensive understanding of blockchains are still hard to find and I find myself having to constantly adjust and increase my thought processes when analyzing blockchains.
As a result I respect the TA from Henry Weingarten and will keep him in the back of my mind. At the same I make sure I can make up my own mind and not blindly follow analysis.
He quite agree with him. My personal opinion is this:
Bitcoin has no true value. Bitcoin is the first decentralized digital cryptocurrency but if you analyze if well you will see that bitcoin currently has no true value. It was initially created allow peee-to-peer transactions without intermedaries and also for easy international payments because bitcoin is not ties down to a country. But here is the fact, all other altcoins out there solves this samw problem and most of the altcoins add value which bitcoin doesn't do. Ethereum solves smart contracts, steemit creates platform for bloggers. What exactly does bitcoin offer different from all other coins?
I see altcoins taking over soon
I used to think the same thing when Ethereum came out. What does bitcoin do that Ethereum does not? But I don’t think it’s that simple.
Only time will tell.
So my first class flights and hotel stays that were PAID by Bitcoin are worthless. LOL .. these people who continue to think Bitcoin has no value. Fuck 'em.
heheh I think just having btc fucks them......
INTERESTING.... AND MAC afee eat his shoes if it will not be 1 million each in 2020!!
There are so many different opinions and valuations of bitcoin, and this one more. Whenever somebody tells me about his bitcoin bias, I'd like to ask him about his open positions: Are you long or short? If you are convinced that bitcoin is about to go to zero, are you short?? A proofable opinion is only valid with some money on the table! Can you imagine poker without money?? Regarding me I have some coins on the long side and I will HODL. Is gold a handy store of value? No, not easily to handle but very secure. I think bitcoin is of the same kind. So bitcoin doesn't need to be the technologial leader.
Thanks for reporting this.
Yes this was one of the questions I asked him.
But of course he had only bet against btc with futures so far.
Dem Argument mit der Frage "Long oder Short" stimme ich grundsätzlich zu. Allerdings bin ich der Meinung, dass sie bei BTC nicht anwendbar und aussagekräftig ist. Drei Möglichkeiten, um von fallenden Kursen zu profitieren:
Dadurch muss ich die Ausgangsfrage "Short?" mit "nein" beantworten, obwohl ich von einer Dezimierung ausgehe.
Viele Grüsse.
this could be an interesting thing in April later.
yes sir, you're right about "Bitcoin has no Value" from the Princeton Meetup. i agree with you. thanks sir @knircky for all time give me helping and interesting post. love you :) :) :)
very important post
thanks for share it
I agree with you, sir. Thank you for this interesting explanation @knircky ♡ #Upvote #Resstemed
Coins mentioned in post:
It really good to keep getting information from different source reason been that I read a post some minutes ago about bitcoin, and it was said that bitcoin is going to rise in two months time and it aren't dropping anytime soon. But thank goodness I saw this and I now have more information about it thanks for sharing the information with us all.
On your last point, interesting graph shared by Peter Brandt on twitter illustrates the comparison between 2018 and 2014 bear markets.
Disclaimer: I am just a bot trying to be helpful.
Thanks for sharing @knircky. Interesting arguments at I somewhat agree with, but also don't in many ways.
As a full time person in this industry, I study the the concept of economic value and tokens a lot. Bitcoin has some core economic value, has a relatively good velocity, and is also the building blocks of a technology.
Something that no one talks about is how secure it is. Using the Bitcoin blockchain, people could potentially build some form of encrypted file structure to store info, thus leveraging its security, due to the amount of mining power it has used to be secured.
It has intrinsic value, but I agree that because of its inferiority, it could hit 5k in the Summer - but then again if one looks at Metcalfes law, it makes sense that it will increase in value. There are string arguments both sides!
I just out you on autovoter because I really like your content, I'd really appreciate your support on my latest post.
I wouldn't be surprised if he will be right, at least partially.
Bitcoin is using some older blockchain technology and other coins, i.e. Litecoin or Steem are way faster and easier to use and transfer.
Whether it will really go down to Zero, I don't hope so since it might take many other coins down too.
However let us hope for a brighter April first!!
It's nice to know that astrologers can become money managers. The Astrologers Fund? But seriously... I think that any disruptive technology is always viewed as an inferior technology. That's straight from Clayton Christensen and his books on disruptive innovation. So for Weingarten to call Bitcoin an inferior technology and then dismiss it entirely is missing the point. I think that where Bitcoin is innovative is that it is a currency + payment network + store of value (well, kind of) + financial asset. Thus, you can't apply traditional analysis to Bitcoin and just try to value it as a currency, etc.
Henry outed himself when he said BTC has no value, last I checked its over 10g.
The low tech of BTC is what keeps it secure, giving it a 10 yr track record and BTC has become a brand with great recognition and reputation. The fact that BTC is the main currency of exchange in cryptocurrency makes it the most valuable asset in the space. It's like saying paper money and rare gems (not all) have no value since they hold no industrial use.
While its incredibly hard to predict the future will 100% certainty Henry makes some good points. In my opinion, I have little doubt Bitcoin will become the alt coin and I believe ETH is the most likely Crypto to surpass it in market cap. If ETH keeps just half the same pace of growth it has in the past against Bitcoin, the flippening will happen in 2018. For many reasons ETH has always been my biggest position, so I am biased. I guess we'll soon find out. I just hope the whole Crypto market does not suffer a bear market like 2014. That was brutal and too long to have to go through again.
The point that interests me the most is this one:
I would like to understand how can steem be considered 3rd generation and ethereum 2nd. With EOS having the possibility of being 4th?
I don't really understand that point.
The classic thinking goes like this
2nd generation is the advent of smart contracts, i.c. Ethereum.
3rd generation is the advent of decentralised autonomous corporations (DAC), i.c. Steem, Bitshares
I would put EOS in that context as a faster, leaner meaner 2nd generation which will lead to faster, meaner, leaner 3rd generation :-)
Which generation would you place The Tangle? (IOTA)
They say "The next generation" but iota is not a blockchain at all, there are no blocks, there is no chain :-)
The Internet of Things next generation where things can be little independent selfruling entities, they borrowed some ideas to make safe payments and interactions, something like that? It is the already existing "Internet of Things" hype that gets extra hyped by hippie crypto technology :-)
Thank you very much for this posting with the convictions of Henry Weingarten and the summary with your opinion.
Thereby I got some detailed answers to questions published in my posting yesterday.
Best regards, from the near of Black Forest.
I think Bitcoin can be overtaken and I hope better blockchains and coins manage to do that, but I don't think its value will ever come close to zero. I agree that Bitcoin clearly has value. Nothing that doesn't have value gets traded for value, so that's a really flimsy argument to make in my humble opinion.
I wonder how his astrological analysis on this topic (based on Western astrology?) differ from an analysis via Vedic astrology.