"Bitcoin has no Value" from the Princeton Meetup

On Friday I attended the Princeton Crypto Meetup.

It was basically a Panel discussion.
One of the more vocal and interesting panel member was Henry Weingarten who manages the Astrologers fund.

Henry has some very interesting convictions and predictions about bitcoin and its price. Here they are if I remember them correctly:

• Bitcoin has no fundamental value and can only be analyzed technically
• The volatility of bitcoin and cryptocurrency is crazy and like nothing we have ever seen before
• Bitcoin is first generation technology and inferior to other generation 2 and 3 blockchains or coins
• Because bitcoin has no value and will go to 0
• If I remember his prediction correctly he thinks bitcoin will rise in April and then crash in the summer below 5k, with a target of 4500. I believe the date is June 4. (it could be July).

First off all I want to say that I was very impressed with his arguments and genuine believe that he is very capable from his interaction in the panel. I also find the prospect of bitcoin below 5k in the summer quite possible.

That said I want to go into these statements in detail. Starting with the one that I believe is the most true.

Bitcoin is first generation technology and inferior to other generation 2 and 3 blockchains and coins

I do agree with this statement. There is no argument to be made here. The tech of btc is the first generation and has many architectural artifacts that will be hard to overcome relative to other blockchains. Ethereum would be a 2nd generation and Steem and Cardano a 3nd generation. Maybe EOS is a 3rd or 4th generation blockchain, we will see.

Bitcoin has no fundamental value and can only be analyzed technically

This argument by him is something, where with all due respect, I simply believe Mr. Weinstein has not looked closely and been lazy analytically. To me this statement is clearly an illogical argument.

If I understand him correctly one of the reason why bitcoin has no clear value is because of the technological inferiority. While I agree with that, technology alone is only part of the picture. What most people fail to see is what a comprehensive thing bitcoin is. It changes and incorporates everything, but we tend to think in categories and patterns that we are used to, especially when we have a more developed neuro network in our brain (i.e. are smart and older). As such most people tend to take a quick glance at bitcoin and come to conclusion that fit existing patterns and how we operate in the world.

The problem is bitcoin creates a new reality, where old patterns do not apply quite so simply. Bitcoin can very well be fundamentally analyzed. Just not like you analyze stocks or other financial assets that Wall Street is used to. I don't want to explain how in this post, just state that I think Henry has probably not looked closely enough to understand what bitcoin is.

So if you don't understand its value, I'd suggest you look a bit closer and figure out why it has value or why it cannot have value.

Back to the technological inferiority argument, I think there are many other parts that are just as important, such as the network effect, the brand, infrastructure etc. Additionally we are at a state where the technology is good enough and what is missing will be delivered in future releases. The thing is adding technology tends to be easier than adding all the other stuff. It would be easy to copy Facebook technically, but it will be impossible to compete with it due to all the non technical things facebook has going for it (network effect, brand, users, data, integration with others, infrastructure etc).

Because bitcoin has no value it will go to 0

So since I do believe it has value, I do not believe in this either. I still hold lots of bitcoin relative to my other cryptos. However I do believe his statement can be correct, if a competitor will actually take over bitcoins market cap. I believe this could cause a flipping that would play probably faster than many bitcoin bulls can imagine. So this is a possibility just like everything bitcoin will likely not exist forever, yet right now it clearly is the boss of crypto.

Bitcoin will rise in April and then crash in the summer below 5k

This is another statement where Henry can very well be right. I also see the possible that we are in a bear market for bitcoin right now. I am not sure that we are but many things this year look like 2014 to me which was my 2nd bitcoin bubble.

Summary

I think it is very important to learn from people like Henry, since they clearly bring a skill to the table and many parts of their analysis may be correct. That said instead following such experts blindly, I like to try to learn which perspective they can show me that I have not seen myself.

What I find very interesting in this space is how many experts we see on TV and on Panels that actually do not understand the very basics of bitcoin and blockchains. And even most experts that do know what they are talking about often miss key aspects that are not of their expertise to form my own analysis.

Another example of such would be the more technical experts, that can code blockchains but often miss the bigger economic picture or fail to make money with it. Folks that have comprehensive understanding of blockchains are still hard to find and I find myself having to constantly adjust and increase my thought processes when analyzing blockchains.

As a result I respect the TA from Henry Weingarten and will keep him in the back of my mind. At the same I make sure I can make up my own mind and not blindly follow analysis.