It seems that with the bitcoin and crypto markets doing so poorly as of late, crypto fanatics and traders are doing all they can to potentially make themselves feel better about the situation(s). Thus, the new narrative for bitcoin is not that it’s a hedge against inflation or that it’s digital gold. Rather, most crypto traders are telling themselves that “a bitcoin is a bitcoin.”
Bitcoin Is What It Is
What does that mean, exactly? Well, it seems to mean exactly what it sounds like. One BTC is equal to one BTC … Nothing more, nothing less. This seems to be something that many investors are telling themselves about the present market. They’re making it clear that bitcoin has not necessarily lost value, only that its price has gone down, and should bitcoin rise or fall again in the future, that value will remain the same and only the price will be affected.
Joshua Lim – former head of derivatives at Genesis Trading – explained in a recent interview:
1 BTC = 1 BTC is something bitcoin maximalists say tongue-in-cheek when looking at the USD price of BTC becomes too painful. The implication is that BTC will eventually become a unit of account, so just focus on the absolute number of BTC you own today.
Ilan Solot of Tagus Capital fame says bitcoin has not proven itself to be an inflation hedge, and that anyone who believed such a thing did not have a clear understanding of crypto or the technology behind it. He commented:
The narrative was never really bitcoin is an inflation tracker. It’s not TIPS. Bitcoin was a hedge against irresponsible money printing by the central banks.
Stephane Ouellette – chief executive of FRNT – also threw his two cents into the mix, claiming that BTC was still too tied to other risk assets. He said:
Narratives tend to follow markets, more often than the other way around. When things are correlated, one way of looking at it is that it’s the same kind of traders of strategies that are involved. Ultimately, there is a growing and significant percentage of BTC holders who will never sell their BTC and those that use it for commercial purposes. At a certain point, BTC will start behaving differently than risk assets, but clearly, it’s not there yet.
Still Too Much Risk
Peter Mallouk – president of Creative Planning – also commented with:
We now know that cryptocurrencies are not inflation hedges. They’ve proven that to us, now. It’s a big, big speculative play for anybody that’s interested in it.
The crypto space has been suffering from hardcore bears for the past 11 months. The world’s number one digital currency by market cap was trading at a new all-time high of approximately $68,000 per unit last November, though now, the currency has lost more than 70 percent of its value.