We believe that bitcoin, via its nature as a global, decentralized, fixed-supply, non-sovereign asset, has risk and return drivers that are distinct from traditional asset classes, and that are fundamentally uncorrelated on any long-term basis. We maintain this conviction even as short-term market trading behavior occasionally diverges (in some cases profoundly) from what bitcoin's fundamental characteristics would suggest.
We observed this as recently as August 5, 2024, when bitcoin saw a one-day drop of 7% alongside a 3% fall in the S&P 500, as global markets experienced a sharp pullback related to the unwinding of the Japanese yen carry trade. This episode coincided with a series of bitcoin-specific events related to long-pending bankruptcy distributions and liquidations (Genesis, Mt. Gox) that had already been unfolding over the preceding three days. That was then exacerbated by the scramble for liquidity caused by the global market sell-off that was taking hold.
As has been a common pattern during these occasional episodes of short-term, sharply negative co-movement with equities, bitcoin's price rebounded, overtaking its level from before the sell-off within three days. We view this pattern as instances of fundamentals eventually prevailing over short-term leveraged trading reactions. As Warren Buffett has said, "The stock market is a device for transferring money from the impatient to the patient." This wisdom has also tended to be true for the bitcoin market throughout its history.
npub1zl…22n8p
2024-09-18 09:41:01
Author Public Key
npub1zlypm2nj0mz4je2zrhxlm3pyvl73h8vg778083k0w2avs6vc7xkqp22n8pPublished at
2024-09-18 09:41:01Event JSON
{
"id": "5c4918b85da1df245bb3b36c8e274820df04c2d633b0a0abdbe82454350e0708",
"pubkey": "17c81daa727ec55965421dcdfdc42467fd1b9d88f78ef3c6cf72bac86998f1ac",
"created_at": 1726652461,
"kind": 1,
"tags": [],
"content": "We believe that bitcoin, via its nature as a global, decentralized, fixed-supply, non-sovereign asset, has risk and return drivers that are distinct from traditional asset classes, and that are fundamentally uncorrelated on any long-term basis. We maintain this conviction even as short-term market trading behavior occasionally diverges (in some cases profoundly) from what bitcoin's fundamental characteristics would suggest.\n\nWe observed this as recently as August 5, 2024, when bitcoin saw a one-day drop of 7% alongside a 3% fall in the S\u0026P 500, as global markets experienced a sharp pullback related to the unwinding of the Japanese yen carry trade. This episode coincided with a series of bitcoin-specific events related to long-pending bankruptcy distributions and liquidations (Genesis, Mt. Gox) that had already been unfolding over the preceding three days. That was then exacerbated by the scramble for liquidity caused by the global market sell-off that was taking hold.\n\nAs has been a common pattern during these occasional episodes of short-term, sharply negative co-movement with equities, bitcoin's price rebounded, overtaking its level from before the sell-off within three days. We view this pattern as instances of fundamentals eventually prevailing over short-term leveraged trading reactions. As Warren Buffett has said, \"The stock market is a device for transferring money from the impatient to the patient.\" This wisdom has also tended to be true for the bitcoin market throughout its history.\n\n",
"sig": "dc0475ac420c6733886b80287beff1ae22cf8f2e527fafd5e051863eb832db0645133f0811ac24fe1b356b70792d40661b4d69c84bc283b31818673b5409d250"
}