Not a bad piece but Bitcoin should not be defended as a "financial speculation." Bitcoin is a MONETARY speculation rooted in the belief / fear strengthening by the day that the legacy financial system is broken and breaking. Bitcoin's price point is far less important in the same way that Amazon's stock price was far less meaningful than the growth of its supply chains or AWS infrastructure. The growth of mining capacity, users, custodial infrastructure, enterprise services, and monetary transactions are the key drivers.
Taleb is in strong agreement with Bitcoiners that the legacy-fiat-system is a rigged Ponzi scheme set to explode. It is not clear how Gold can fix Western finances without recapitalizing the banking system (good luck with that) because it cannot transact without third-party rails. Bitcoin's use case is it's capacity to dis-intermediate the banking system if / when fiat melts down. In this sense, Bitcoin can work both in the event of hyperinflation or a credit crisis (latter is more likely IMO). Bitcoin was built to do so. It should therefore be defended on those grounds, not on speculative ones.
Taleb seems to past his prime if he is unable, or simply too emotionally stunted, to analyze bitcoin with enough nuance to realize that despite it's flaws, it's clear that the bitcoin network become incrementally more useful and therefore more valuable every month due to increased adoption etc. The daily price, weekly price, and even monthly price levels can often be distractions when analyzing a new asset class. Also, anyone with financial privileges is less likely to see the big picture use case than those in countries with authoritarian regimes and/or with rapidly depreciation of their home currency.
He's extremely smart but what I find strange is how he expected BTC to be exactly inversely correlated with tradfi on a daily timeframe. It's not a financial contract like a put option, so it's absurd to expect -1 correlation with other risk assets.
Not a bad piece but Bitcoin should not be defended as a "financial speculation." Bitcoin is a MONETARY speculation rooted in the belief / fear strengthening by the day that the legacy financial system is broken and breaking. Bitcoin's price point is far less important in the same way that Amazon's stock price was far less meaningful than the growth of its supply chains or AWS infrastructure. The growth of mining capacity, users, custodial infrastructure, enterprise services, and monetary transactions are the key drivers.
Taleb is in strong agreement with Bitcoiners that the legacy-fiat-system is a rigged Ponzi scheme set to explode. It is not clear how Gold can fix Western finances without recapitalizing the banking system (good luck with that) because it cannot transact without third-party rails. Bitcoin's use case is it's capacity to dis-intermediate the banking system if / when fiat melts down. In this sense, Bitcoin can work both in the event of hyperinflation or a credit crisis (latter is more likely IMO). Bitcoin was built to do so. It should therefore be defended on those grounds, not on speculative ones.
Taleb seems to past his prime if he is unable, or simply too emotionally stunted, to analyze bitcoin with enough nuance to realize that despite it's flaws, it's clear that the bitcoin network become incrementally more useful and therefore more valuable every month due to increased adoption etc. The daily price, weekly price, and even monthly price levels can often be distractions when analyzing a new asset class. Also, anyone with financial privileges is less likely to see the big picture use case than those in countries with authoritarian regimes and/or with rapidly depreciation of their home currency.
He's extremely smart but what I find strange is how he expected BTC to be exactly inversely correlated with tradfi on a daily timeframe. It's not a financial contract like a put option, so it's absurd to expect -1 correlation with other risk assets.