Bitcoin Bear Market Diaries 2022: Volume 2 with Frito2x
Name: @frito2x
Country: USA
How do people know you?
I’m not sure shitposting with a handful of plebs makes one known. I’ve written for @ctdl21. I host the Children of the Corn Plebcast. My friends sometimes have me on their pods / shows.
How long have you been into Bitcoin?
At heart I have been a bitcoiner 2013-2015 and 2017-present.
How many Bitcon market cycles have you been through?
3.
What are you optimistic about in this space despite the current state of the market?
A lot of smart people have been orange-pilled. Orange-pilling is a one way door. We are growing. Bitcoin is a beacon of light in an increasingly dark world. It has the potential to fix everything. We need it. The current price doesn’t change that bitcoin is the apex predator of money. The current price doesn’t change how slimy the fiat system is. I’m also addicted to the bull runs. There are few greater dopamine hits. The fringe energy monetization narrative seems insanely bullish in itself.
Why do we have bear markets?
I think a lot of people would cite the S2F model, and I wouldn't go as far to say that it is completely invalid but it is obviously lacking something.
I think that bitcoin is different from other markets because most bitcoiners are mostly all in already. I understand the ethos of dollar cost averaging new income and continuing to stack sats (I think for most people this is the best way to bitcoin), but most hodlers don't tend have a lot of dry powder to buy the dips with- if they did then they are more traders than hodlers.
For a new bull run to emerge, there must be new buyers- but most will not be new buyers until a new bull run occurs- so I think that's why in bitcoin the tops and the bottoms are more dramatic and prolonged than they would be in other traditional assets where people are not as passionate.
I think that the unique supply "inflation" quality of bitcoin and it's stock to flow matter, but the reason that S2F isn't perfect is because FOMO, fear, and the extremist tendency of bitcoiners to already be all in also matter- and we don't have a perfect equation to account for all of these in the bitcoin market.
What tips do you have to those who are new to this or who might be upside down?
Read both of Saifedean’s books. Learn why: 1. Bitcoin is the only sound money, and 2. The fiat system is working against every aspect of our lives. Listen to some podcasts. Don’t try to time the market. Bitcoin price is a wild beast that can’t be tamed. Price is noise. Zoom out. DCA is the best strategy. If you can’t sleep at night, your allocation to bitcoin is too high and/or you haven’t studied enough. Stay away from shitcoins. They are all scams. During bear markets, either focus on learning more or change course and focus on other types of self-improvement. It’s historically been a bad strategy to sell bitcoin during bear markets.
Biggest regret during the last bull market?
Telling people that my bull run price target was 200-300k. That was overexcitement and hubris on my part. Bitcoin does what it wants.
What have you learned so far in this bear market?
We have again learned that shitcoins remain without any rational use case other than to create workless tokens that can be dumped on ignorant fools or degenerate gamblers.
I think it’s fair to say we are not at hyperbitcoinization, so getting on zero proved to be a horrible idea. I don’t think we are close to hyperbitcoinization. The masses seem too easily bamboozled. Bitcoiners have unfortunately proven to be easily distracted.
I’ve consumed a lot of great bitcoin material recently. There are many great bitcoiners that could be cited as information sources. In my opinion, the bitcoin plebs are more reliable sources of information than "influencers". Unfortunately the influencers have a tendency to hold back the whole truth because the whole truth can hurt their brand in some way. I think it's important to deploy one's bullshit meter and once it starts giving a warning signal it's time to move on to another source of information. Some people would call this internal cancel culture toxic, but in bitcoin to survive I believe that it is necessary.
Are you tempted to try to time the next bull market and try to sell at the top?
Yes, it is tempting to think about but I think that I will likely just continue to hodl for a while. Bitcoin keeps humbling me and I realize that I cannot predict the tops or bottoms. I don't regret not selling at higher prices in 2021. I believe we are going much higher. Bitcoin isn't dead and it's much stronger now than it was in the past. The narrative is super bullish. There are a handful of days per year where the big moves tend to happen so quickly. I can't predict them and I don't want to miss them. Hopping off the train is dangerous. Even if I do manage to time the market, I would have to pay capital gains taxes so I'd have to win trading by 40% just to break even. The point in time and space that I spend my bitcoin will likely depend on jurisdictional arbitrage because there will be a time and place when and where there is no capital gains tax. Bitcoin will make citizens customers again. For now, bitcoin is my savings account and it serves as unit of account. There are individual factors that matter. Fiat world privilege and success matter. Age matters. I can afford to have a relatively low time preference so I can wait for America and or other states to become more favorable (reasonable). Maybe options change when a cheeseburger is 50 bucks. One plan is not for everybody. If I were older and or needed the money, I'd be looking more for selling opportunities. I do think it's possible to have too low of a time preference. One has to live.
What is the biggest fail you have seen during the last bull cycle?
I’d like to call out 3 fails:
I hate to see all of the based bitcoiners who were smart enough to figure out the singular problem that broken money is the root of all evil now allowing themselves to get distracted by various current issues. We have collectively spent more time calling out different current thing issues than we have spent discussing the devastating effects of the fiat system and how bitcoin fixes those effects. Whatever issue you care about is best fixed by sound money, and freedom will almost definitely be lost unless the money is fixed. Complaining about issues without first fixing the money is like traditional voting- useless. You want to keep your right to do “X”? Increase your personal wealth and defund the state. If the state has unlimited funds and you are poor, guess where this is going? We are losing signal and allowing ourselves to be distracted and divided by secondary issues. I wish we could unite and maintain focus on the one thing that we actually agree on that happens to be the most important tool for freedom and perhaps the most important necessity for continued human survival. If humans keep getting depressed and crazy we will eventually destroy ourselves.
It’s time for bitcoiners to finally recognize that bitcoin is the only sound money protocol that matters (it's probably the only blockchain protocol that matters as well but I'm not even sure that point is important- if one attends a classic car convention, one does not expect to see a roped off exhibit for roller skates just because they both use wheels) and force a separation of discussion between sound money software and other software. We need to stop debating scammers. We need to stop pretending that scam software is comparable to bitcoin, thus worth debating. We are only pulling scams up to bitcoin’s level and that confuses sound money messaging. It is counterproductive for bitcoin adoption and human freedom. We should again be focused on the singular problem of broken money and let other tokens that supposedly (but do not really) solve other problems have their own conversations outside of bitcoin circles. Conferences NEED to do a better job of being bitcoin only and rejecting bullshit. We need to stop falling for it when a scammer pretends to see the light (it's always in a bear market) and declares that bitcoin is the best store of value. If the Bitcoin conference brings Pomp and Novogratz back next year I'm going to barf.
Influencers need to have more self respect and stop collaborating with shitcoiners. Too many of my favorite influencers are so thirsty that they really manage to demean themselves on “crypto” shows.
Some debates are counterproductive. For example, it would be silly for a man to go to Thanksgiving dinner and announce reasons why he would rather sleep with his wife than the Denny’s waitress. Of course he would rather sleep with his wife. His wife is beautiful, smart, and funny. She is perfect. She performs all of the bedroom functions that he finds important. There is no advantage to sleeping with the Denny’s waitress. But by the mere act of publicly making this argument, he brings the Denny’s waitress up to his wife’s level for no reason. His wife is mad at him even though he didn’t necessarily say anything wrong. His Brother-in-law starts going to Denny’s more often. What was the point of that? OK can we please stop bringing ourselves down to the scammers’ level now?We need to stop getting sucked into ESG debates. The state/media have attacked bitcoin saying that it “consumes too much energy”. Bitcoin mining was recently banned in NY. Bitcoiners appropriately stated many facts such as, “the banking sector consumes a lot of unquantifiable energy”, “the Fed is backed by the military and that consumes a lot of energy”, “there are other wasteful energies such as clothes dryers and Christmas lights that aren’t banned”, “bitcoin uses fringe/waste energy and this is actually very beneficial for the power grid”, “bitcoin in some cases reduces emissions by monetizing flared natural gas”, etc. While all of these are true and good arguments, making these cases ignores the elephant in the room: Bitcoin is the best tool for money. We should refuse to compare bitcoin energy expenditure to that of the legacy system because bitcoin is magnitudes better than the legacy system. When arguing that bitcoin “isn’t bad for the environment”, I think we lose sight of the fact that bitcoin is magnitudes better than fiat currency. Our stance really should be:
A. You can’t compare resource expenditure of the two systems because they are different systems.
B. All value is subjective so we do not acknowledge the value you place on bitcoin.
C. Fuck you. You have no right to dictate my use of energy.
What do you think helped trigger the current bear market?
It’s really sad that in a time of inflationary crisis that bitcoin seems like it was built for, we managed to have a bear market.
I hear a lot of bitcoiners talking about rehypothecated bitcoin. I have no idea how much of a factor that was. I assume that although not nearly enough people hold their own keys, more people are self-custodying than there were in prior cycles- so I'm not sure that's the problem although it is a problem.
I think it comes down to the sad fact that we have failed to create enough clear signal about the need for sound money. Our messaging is poor. Not enough people are voting with their money. See fails above.
Who were the biggest scammers exposed during this last market meltdown?
Of course there are the usual finance influencer suspects. Once I see somebody with sketchy ethos I block or mute them so I miss a lot of the scammer noise. I'm disappointed in anybody that associates with Raoul Pal. I think Elon Musk might have been the biggest scammer of the past cycle. He seemed to quickly do a 180 on bitcoin when the state that subsidizes all of his stuff told him to stop endorsing a potential state killer. I think it’s crazy that people think that this is the guy that is going to protect free speech. It’s sad that both Elon Musk and Mark Cuban seemed to have opinions about bitcoin but failed to say anything intelligent about it and nobody mainstream called them out on it. The headline should have been, "Musk and Cuban Sound Off on Bitcoin- But Obviously Have Not Studied It“.
What kind of damage do you think the latest price drop has done to buyer sentiment?
Significant but normal damage. This is how the cycles work. Normies will probably be too scared to buy bitcoin for the next couple of years. Therefore they won’t learn about it. Then I assume they will pile back in at the top in 2025, at which point only a small fraction will bother to go down the rabbit hole and germinate into the next crew of hardened bitcoiners. Normies are kind of like sperm in that way.
What is it going to take to turn this around?
I think we are still fine, but if we want to accelerate bitcoin adoption and reduce overall damage inflicted by the fiat system, then we bitcoiners need to look in the mirror, realize that we need to develop a better focus, and stop allowing ourselves to be divided and distracted by the current thing and/or shitcoins so we can create a better signal about the need to replace broken money with sound money. Nothing else gets fixed until that happens. We better hurry the fuck up too because fiat culture is quickly deteriorating.
It is time for bitcoiners to stop having opinions on everything.
Do you think Michael Saylor, Elon Musk, Jack Dorsey or any big company or name will capitulate and sell their Bitcoin?
I don’t know. Maybe. I could see the price tanking if it happens. It wouldn’t surprise me.
What are your tips for HODLing Bitcoin through downturns?
Keep learning about bitcoin. Also go get some other hobbies. Get away from Bitcoin Twitter because there is a lot of negativity as bitcoiners tend to find dumb stuff to fight about during bear markets.
How do you feel about alt-coins and NFT’s?
They may have some use cases but those use cases- if any- pale in comparison to the holy grail that is sound money. Bitcoiners need to start separating bitcoin from these other software “projects”.
What kind of impact do you think the radical drop in alt-coins and NFT’s will have on their future?
I think the scams will hurt a lot of people and unfortunately confuse and deter a lot of people who would have otherwise been bitcoiners- but shitcoins and NFT’s aren’t going away and the cycles will continue with the next group of noobs certain that they have unique info that will allow them to outperform the bitcoiners that have lived through this chaos for many years.
What do you think about shitcoins like Luna, Celsus, etc imploding?
I haven’t paid much attention to them.
What is the best way to accumulate Bitcoin during a down market?
Nobody is going to buy bitcoin in a bear market unless they really put the work in and understand what they are buying. If somebody still has the intestinal fortitude to buy bitcoin, now is a good time to avoid reducing DCA allocation. I recommend avoiding Coinbase. They seem to be making it difficult to withdraw funds and they have a long history of choosing the state over the customer. Fuck Coinbase. For me, trying to trade and time the market is too risky. There are potential tax implications and I think it's too easy to miss unexpected upturns. Also for the love of God stop trying to outsmart boring DCA strategy with some promise of guaranteed yield. That tends to work out very poorly. Stay humble and stack sats.
How bullish are you on Bitcoin despite this recent pullback?
The same. Very. If bitcoin doesn’t work, we will all be poor anyhow.
Any tips you want to give to people new to Bitcoin?
Nobody knows everything, but understand that there are a lot of bitcoiners out there that live and breathe this stuff. I know a lot of people that study bitcoin and money every day for hours. There are people that spend much more time learning about bitcoin than they do learning about their vocations (in a fiat world, the reward for getting better at most vocations is limited). These people have seen some things that you wouldn’t believe. They have been through crazy highs and lows. You should probably listen to them.
Any last words of wisdom?
Start paying attention to the fact that broken money enables everything you are mad about. We can't fix anything until we fix the money. Bitcoin is the only chance we have at fixing the money. Shut up about your stupid tokens. Nobody should be giving a shit about questionable smart contracts or questionable bank transfer efficiencies right now FFS. People excited about these things are NPC's. The war will come down to bitcoin-enabled individual freedom vs. an increasingly dystopian socialist hellscape. The future depends on a re-focused bitcoin community improving signal production. I would really like to see more influencers and more conferences taking responsibility for assuring our collective signal improves. Stop going on “crypto” shows. Stop giving “crypto” traders platforms. Long live the Bitcoin Carnivore Taco Plebs. May you always stay toxic frens.
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