Avoiding the Narrative Trap: Bitcoin Is More Than an Inflation Hedge

The Breakdown

Blockworks

Investing, Business

4.8 • 806 Ratings

🗓️ 13 June 2020

⏱️ 26 minutes

🔗️ Recording | iTunes | RSS

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Summary

Today on the Brief: Why bitcoin sold off A bank-the-unbanked narrative for the digital dollar It’s Dave Portnoy’s world and we’re all just living in it Today’s main topic: Why inflation isn’t the only bitcoin narrative that matters. When bitcoin’s halving coincided with the most aggressive central bank policy of all time, it set a clear narrative framework for bitcoin as an inflationary hedge. This was captured by people like legendary hedge fund investor Paul Tudor Jones, who warned of a “great monetary inflation.” In this episode, NLW argues 1) that inflation could be a dangerous narrative to focus on too closely due to a number of countervailing deflationary forces, and 2) there are a variety of other narratives that are just as important to bitcoin, including: Censorship resistance Seizure-resistant asset Currency controls and reshoring Nations looking to escape USD system Independent banking Peaceful protest

Transcript

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0:00.0	Welcome back to the breakdown, an everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond.
0:13.0	This episode is sponsored by BitStamp and Cipher Trace. The breakdown is produced and distributed by CoinDesk.
0:22.6	And now, here's your host, NLW.
0:27.9	Welcome back to The Breakdown.
0:30.0	It is Friday, June 12th, and today we are going to be talking about why inflation isn't
0:35.6	the only Bitcoin narrative that matters, but first, let's do
0:39.5	the brief. First up on the brief, why Bitcoin sold off. So what happened? This one is not going to
0:46.3	come as a surprise. Obviously, you were all in your blockfolios, I'm sure all of yesterday. Bitcoin
0:50.2	dropped something like 6%, from 9,800, 9,900 down to 9,100, 9200 at the low.
0:56.7	And there are a few different reasons that people are saying that that might be.
1:00.7	The first is correlation with an equity sell-off.
1:03.3	We saw stark markets kind of have a pretty meaningful correction after running like an absolute
1:08.4	freight chain.
1:09.3	Yesterday, the Dow Jones fell 1,800 points.
1:11.9	And the best reason we think for that is that the Fed's guidance on Wednesday was really
1:17.9	pretty gloomy, right?
1:18.8	They were trying to tamp down expectations on this idea of a V-shaped recovery.
1:22.8	And it seems like the market finally got the message and started to shift some of its
1:26.9	behaviors,
1:32.8	particularly around stocks that have more indication of actual fundamental economic value.
1:37.7	So things like industry stocks and bank stocks went down pretty significantly.
1:43.1	So we're still in an environment, as much as we call Bitcoin a totally uncorrelated asset.
	...

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