Bitcoin Profits From Chaos

It’s no secret that Bitcoin (BTC) is susceptible to ad hominem attacks from those who want to see it fail. Case in point, over the asset’s history — relatively minuscule in the grand scheme of things — has been lambasted time and time again by mainstream media, traditionalistic CEOs and regulators, and zealous cynics. And while attacks of similar caliber in different industries have killed traditional assets, the crypto world isn’t susceptible to those same rules, claims an industry research group.

Bitcoin, in all its antifragile nature, profits from chaos, claimed ByteSize Capital in a recent Twitter thread into the asset’s underlying nature. The research consortium and private fund claimed that BTC is the world’s first asset that benefits from naysayers, due to the theory of antifragility, defined as a property in systems that bolster their defenses, even amid volatility, noise, stressors, and other shortcomings.

ByteSize’s researchers noted that every time the first cryptocurrency purportedly “dies,” it becomes harder to kill, accentuating the fact that the 90% drawdowns in BTC’s past haven’t curbed the project’s growth. In fact, some would argue that the bear markets of yesteryear have been more beneficial than detrimental.

ByteSize even quipped that Bitcoin can be likened to a phoenix and a hydra simultaneously, touching on its the project’s monumental resurgences following paradigm-shifting bear trends. The researchers claimed that the boom and bust cycles birth liquidity, human capital, and innovation, specifically touching on Coinbase’s and Binance’s surges to fame following precarious market conditions.

In terms of 2018’s price plunge, ByteSize explained that ErisX, Bakkt, and Fidelity Digital Asset Services will be the key organizations birthed from the belly of the bear. Not only are game-changing platforms born out of downturns, but so are the so-called class of “True Believers,” who are forced into becoming Bitcoin diehards due to the collapse of alternative crypto assets. ByteSize wrote:

“Ironically, those burnt the hardest often become the most vocal champions of Bitcoin. A 90% drawdown, yet an increase in investor conviction. Can you think of another asset which behaves this way?”

They added that this “immersive feedback loop” of apparent death followed by growth, which has become an integral part of Bitcoin’s being, is antifragility in and of itself. Hard stop.

ByteSize went on to add that BTC is non-correlated and asymmetric, a byproduct of its evident antifragile characteristics, directly echoing comments from Morgan Creek’s top brass. The firm explained that not only do critics have “high reputational downside” if they choose the wrong side of financial history, but investors have “high financial upside” if Bitcoin wins — asymmetry exemplified, which makes it a tantalizing investment and experiment alike.

While some cynics have been overtly skeptical about the “antifragility” argument, ByteSize’s recent comments on the crypto asset seem to be all but baseless. As Bitcoin was declared dead ninety times in 2018, the network’s underlying fundamentals boomed, surpassing price action and its historical performance by boatloads. Per previous reports from NewsBTC, price aside, 2018 was arguably Bitcoin’s best year yet.

Armin, a pseudonymous crypto enthusiast, explained that by many measures, there were a handful of developments that made 2018 a great year for the world’s first cryptocurrency. Bitcoin saw the 0.16.0 and 0.17.0 installments of its core software go live, the former of which aided SegWit’s pertinent arrival to the mainstream. Blockstream also made strides, allowing offline consumers nearly all across the globe to access the Bitcoin blockchain via a series of satellites. And even while the network’s hashrate has recently stumbled, it remains up by 200% year-on-year, accentuating the fact that miners still see value in BTC.

As put by Anthony Pompliano, a Morgan Creek Digital Assets founder, the crypto “was designed to survive.” And survive it has, even as bears did their utmost to kill the proverbial cockroach that is Bitcoin. Like ByteSize wrote, “even when “dead”, Bitcoin is as alive as it has ever been.”


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