Money is the mother of all network effects

1} Money is the mother of all network effects —

We gain wealth by choosing to value the form of money that others value, and we lose wealth if we choose wrong. Let's apply this principle to Bitcoin

Let us ask first?

Why gold emerged as the singular worldwide monetary standard after 70,000+ years of free market experimentation with various commodities as money

Well because:

It was the hardest commodity to make more of and therefore the most reliable store-of-value for hard-earned wealth. The result of this is that humans store ~40x more wealth in gold (~$12T total value) than the #2 store-of-value commodity, silver (~$300B total value)

When humans store wealth, they intrinsically select a store-of-value that they anticipate others will value in the future.

2} Bitcoin adoption shows Humans value it as a store of value. When you buy a bitcoin,

You're buying 1/21 million of all the money on the network or all the money in the world that's ever going to be on that network. Okay, so would you want to own 1/21 millionth of all the money in the world in ten years, 20 years, next 50 years

You can even pass it on to your grandkids. The product is not obsolescing. It's 1/21 millionth of everything. Its' energy stored in concentrated form in Bitcoin, so you actually would own 1/21 millionth of all the energy on network

Einstein said, energy can neither be destroyed nor created. You can just transform it, right? It's a pure idea, and that's Bitcoin

A network that was created by a nameless anonymous figure, Satoshi. And Satoshi gave a million coins to the universe

It's a digital monopoly with no labor risk, no war risk, no product risk.

FEW UNDERSTAND THIS

3} In fact - The supply/demand lessons you learn in Economics 101 still apply. A look at some of the charts to drive home my point

Bitcoin addresses with BTC>=1 (Increasing)

Bitcoin is "HODL"ing, People are stacking SATS more than ever

Old investors are more stubborn - the more you know of Bitcoin, the more you HODL

Bitcoin is turning profitable even at 29K for most HODLers

Fundamentals point directionally towards eventual growth of the network. It’s inevitable.

The global cryptocurrency market cap today: $1.09 Trillion

Weekly change: -10.82% | Yearly change: 6.7%

Bitcoin (BTC) is the largest cryptocurrency with a market cap of $504 Billion.

Weekly change: -0.54% | YTD change: 55.97%

Another important metric is Bitcoin dominance which can be used as a rough indicator of the relative strength of Bitcoin versus other cryptocurrencies. A high Bitcoin dominance means that Bitcoin has a large market share and is potentially more influential in the overall cryptocurrency market and vice-versa.

Bitcoin dominance: Current Year: 48.25% | Last year (Sep 2022): 39.02%

The market sentiment has gone back to fear levels now post FED interest rate hikes

Note: The data used is based on metrics like Volatility, Surveys, Bitcoin Dominance, Social and Google Trends. Source: Coinstats

Let's have a look at Ethereum supply changes post its merge to a PoS blockchain from PoW.

The significance of the chart - understand how the supply of Ethereum is decreasing post the merge, which means “deflationary economics” for the Blockchain

Supply change since merge POS -305,897 ETH

The graph highlights POS issuance since the merge. Impressive numbers, look super bullish for ETH long term given the supply of ETH is not growing as before

U.S. August Job Adds of 187K Vs Estimates for 170K; Unemployment Rate Rises to 3.8%’ With spot bitcoin ETF aspirations sidelined after the SEC yesterday pushed off decisions on a raft of new applications, crypto bulls are hoping an employment slowdown and lower interest rates could provide a positive catalyst.

The Trillion Dollar Crypto Opportunity: Real World Asset Tokenization Going by technology theorist Carlota Perez's research, "RWAs" may be the next phase of substantive crypto development.

And now the funny part,

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research