Your first bitcoin. How much you struggled for him. How long did you believe it unattainable, and how much effort you worked for him, despite the absurdity, despite your own disbelief. Satoshi to Satoshi, stacking as if they were blocks in an Egyptian pyramid. Suddenly, the planets aligned: a long bearish market coincided with an unusual increase in your income. “Finally, Wholecoiner!”you thought, while the most recent transaction to your wallet hardware made you transcend you from the world of decimals to the desire for the plane of the integers. In the ocean of the Holders, you evolved from shrimp to crab. And how powerful you felt your tenazes.
And as the spring follows, the bassist market happens to the bundle. Halving, and as a clock, a few months later, the price of Bitcoin takes off. Although you are still a crustacean, you are in a hurry to become cetacean. It has decreased the marginal utility that your only BTC provided you. You continue to maintain the FiTa Fast Enrichment mentality. It no longer satisfies you that it is equivalent to a hundred thousand dollars; You want me to be worth a million and you have no patience to wait for the years that it takes.
So you go to the Altcoins. You see that some rise 200%, 300%, 400%in a month. Bitcoin dominance is falling. The Altcoins season seems to be entering. Looking for enrichment in terms of dollar, you decide to change part of your BTC and distribute it in a few fashion memecoins, of which all X influencers are talking. You return to the world of decimals, but it doesn’t matter, because you have hundreds, thousands, in cryptocurrencies that will make you a quick millionaire, a few weeks, probably.
When you least expected: market collapse. The party ended and the massacre began: the shitcoins that you bought rushed into free fall as in the pit of Mortal Kombat after a Fataly. Meanwhile, the bitcoin that you dismembered is the only asset that sustains you from ruin. That was the day you relear the sustainability of savings.
This, more than a cryptocurrency market history, is a story of the Fíat mentality that permeates in all markets of our time.
When central banks make credit expansions and lower interest rates, flood the easy money market. The cost of low money or, in other words, getting money through loans or financing becomes easier. Apart from the feeling of urgency that can generate in people, know that, to a higher current Reduce the zeal with which you used to take care of it when you had less.
Think with ice cream: you eat the first and it’s great; The second, half you cloyed; The third, you prefer to give it away. The marginal utility that provided you decreased. The same thing happens with money: your expense logic is not the same when you have all your needs covered, that when you don’t know what you are going to eat tomorrow. Even your perception of time is affected.
When money is cheap for a credit expansion, investors begin to place the capital created artificially in any project, neglecting the depth of research and analysis they had made if that money depended on their savings. This distributes capital to unsustainable businesses, With fragile bases. The boom is, therefore, a period of evil, where resources are inefficiently assigned due to distorted market signals.
When the credit is exhausted or the interest rates rise, the projects initiated during the boom are revealed as non -profitable, causing the fall of the market. This is the Austrian theory of the economic cycle developed by Ludwig von Mises, and that Murray Rothbard uses to explain the Great Depression of the United States.
Although the main cause of depressions in the economic cycle is due to the intervention of the State and the manipulation of interest rates by the central banks, In the cryptocurrency market they operate similar dynamics.
First, this market is not exempt from credit bubbles created by central banks. During the 2021 upward market, the main narrative that promoted the price was the enormous monetary issuance of the Federal Reserve in response to Covid19 confinements. This expansion of the monetary mass caused companies such as Microstrategy to begin to understand why Bitcoin is a refuge against arbitrariness in monetary policy.
But, beyond the state intervention, at the level of human psychology, the effect of accelerated growth of the price of Bitcoin is similar to the sensation of euphoria of receiving new money product of credit expansion. As much as you have saved to have the Satoshis you have, keeping the Fíat mentality of measuring life in dollars or in some other government currency, suddenly it is as if you had earned money out of nowhere. And voluptuousness and greed enter.
The knowledge and understanding about Bitcoin is still very asymmetrically distributed, so it is in a price exploration phase that will last until the market finishes assimilating it. Until then, it will be natural that there is abrupt price growth, both for new savers that understand it and will try to keep it in the long term, and for speculators who want fast money, and they will change it for Altcoins when they have drawn significant performance in terms of Fíat.
It is at that time when the Altseason begins, When the market is carried by Fomo and greed. And as with the traditional market, when the fuel is exhausted, both of Fíat for the credit expansion, and of Altcoins because the Insiders They take profits and Dumpean In the rookies, it is that the blood runs again to the market.
This is the fundamental difference between believing that Bitcoin’s purpose is make money, rather become money.
While the narrative of the Altcoins has changed over time and no longer say, as in the beginning, that they compete against Bitcoin and their, so called, obsolete technology, the fact is that, when issuing new currencies for their protocols instead of developing their proposals using the Bitcoin network as a base (or instead of not using blockchain at all), they continue to suck resources that would go to Bitcoin.
As Daniel Krawisz argued 11 years ago in his text The imminent disappearance of the Altcoins, There are two things that can be done with a coin: save or spend it. For a currency to work as a means of exchange and have value, It is essential that there are people willing to save it, not only to spend it immediately; If everyone spent without retaining it, its value would fall to zero due to lack of demand.
This is what happens with most Altcoins: being investments that still maintain the Fíat reference in mind, they are bought only to sell them at a higher price, not to save them in the long term. They have value for make money, Not stop become money. The same goes for Fíat money and that is why investors do not save in dollars, but to buy other properties and assets that protect their value over time.
Bitcoin, with its inelastic offer, is one of the greatest certainties we have in our time. For those who understand it, it turns to the rod with which the value is measured, a solid and immovable foundation that allows economic calculation: all between 21 million.
For this certainty, the desire to treasure it arises, and that is why, in time, all Altcoins, thus rise in dollars (infinite supply currency) always lose value against Bitcoin:
And so we could continue sharing graphics with the thousands of Altcoins that exist. None, in its history, has a positive tendency regarding Bitcoin.
Just as the cheap money emitted by the central banks in the boom cycles has historically led to evil that amplifies the impact of the falls, the same logic applies to cryptocurrencies during the calls Altseasons.
Yes, if you take profits in the right time you can earn money in terms of Fíat and even acquire more bitcoin. But, again, this only happens selling the top to someone else who will lose a lot of money. This is the only consequence that results from buying assets only with the perspective of selling them, knowing their long -term unsustainability. When betting on an Altseason only to sell, you are betting on a quick gain in Fíat, not for the project. When you finally understand Bitcoin, you overcome the myth of profits in Fíat.
