Having Faith: 15 Reflections on Bitcoin and the Crypto Market

Author: Meltem Demirors

Compiled by: Riley, ChainCacher

It all started here. Everything we discussed ten years ago when we began building the world's first Bitcoin investment company, Blockworks, has now come to fruition. So, why isn't the price of Bitcoin one million dollars yet?

1. If we exclude Bitcoin and Ethereum, this is the state of the crypto market over the past five years: the coins may have changed, but the overall data has not. This is a big problem—there has been no growth.

2. The market in 2024 is primarily supported by two ongoing buyers - MicroStrategy and BlackRock, but these buyers are not evangelists; they are mercenaries. The buyers of MSTR (MicroStrategy) are arbitraging convertible bonds, while the buyers of IBIT (iShares Bitcoin ETF) are arbitraging basis. Together, they hold 6% of the Bitcoin supply. This is our black swan event.

3. Despite the promises of innovation and the endless promotion of public chains on Twitter, Bitcoin's market dominance is rising, not falling.

There is only one Bitcoin industry, one Bitcoin story, one Bitcoin market.

4. Let's take a look at Bitcoin. We have experienced many amazing rebounds driven by narratives and capital flows. But what kind of narrative or capital flow can push us past the peak of "the U.S. government adopting Bitcoin as a strategic reserve"?

5. While decentralized finance (DeFi) shows incredible potential, traditional finance (TradFi) is currently dominating in terms of revenue. It is expected that in fiscal year 2025, stablecoins and ETFs (exchange-traded funds) will generate $9.1 billion in revenue for institutions. In contrast, DeFi protocols are expected to generate $9 billion in the same period, but this figure largely depends on the trading activity of meme coins.

6. Institutional investors are flooding in! Yes, they see the opportunity to make money, and they want a piece of the pie. It’s not about personal grudges—it's just business. For Trump, attending the DAS (Digital Asset Summit) is about making a big profit. It’s not about personal grudges—it's just business.

They are mercenaries, not evangelists.

7. Those institutional innovators talking about cryptocurrency adoption on Twitter and those frontline warriors discussing meme coins have more in common than you might think.

We need to stop blind worship and start thinking.

Stop the foolishness. (By the way, this includes myself)

8. Do you know what the most profound thing in cryptocurrency is?

Proof of Work.

Bitcoin has shown the world how to build a value chain from energy to computation, creating $60 billion in public equity value.

9. I have said this many times: Bitcoin has at least accelerated the development of artificial intelligence by a decade. Bitcoin has created a new data center business model, including post-metering hosting, flexible loads, demand response, and hedging with underlying assets. This is a profound transformation.

10. I have never publicly expressed this opinion, but it is time to say it: Proof of Stake is a wrong decision. Ethereum could have evolved into a trillion-dollar protocol with a strong energy-to-computation ecosystem. However, the reality is that the MEV (Maximum Extractable Value) mechanism has extracted billions of dollars in value from users and applications.

11. Ethereum once led Nvidia's surge, but now it cannot drive the market up.

12. We need to return to basics. Many markets have reached a liquidation moment, and cryptocurrency is no exception. You cannot defy the laws of physics. But where do we go from here?

13. Our redemption is: energy, computation, cryptocurrency.

It's that simple.

The rest of the story is unfolding slowly—this is our job.

14. Ten years ago, I believed in Bitcoin and invested all my time and energy. A group of internet crazies made the global reserve cryptocurrency a reality through memes. Imagine what else we could do.

Having faith is important.