Bitcoin Investment Thesis From Prominent Cryptocurrency Trader
Cryptocurrency traders Loomdart published a blog post called, “A Bitcoin Investment Thesis” last week. In that thesis, Loomdart outlines his future predictions for crypto markets.
Overall, Loomdart describes crypto markets as a “euthanasia coaster” and a “roller coaster designed to kill its riders”. Some see crypto markets as a bouncing ball that bounced once and then will trickle out over as it loses momentum.
Loomdart, however, disagrees with this:
“I disagree with [the bouncing ball analogy]. It implies that bitcoin is a vehicle that moves with it’s [sic] own momentum, rather than something that can be willingly propelled along by humans. When the ball is dropped, it’s [sic] path is determined. Nothing can adjust this. This simply doesn’t apply to markets.”
Crypto markets are on a “euthanasia roller coaster” according to Loomdart because the markets rose to dramatic heights once and then have been cycling downward ever since. Sure, there are periodic cycles where bitcoin surges in price, reaching the “top” of a new loop: but bitcoin’s price always retreats after these loops as the roller coaster completes the downswing.
Loomdart provides more insight into how modern crypto investments are connected to roller coasters:
“Rollercoasters have many forces acting on them. Kinetic energy, Drag, and most importantly, the motor force propelling the wheels. You can’t change the momentum of the ball. When you’ve let it go, you’ve let it go. It is outside of the bounds of your manipulation (unless you kick it, but who would do such a dastardly thing? This goes against bitcoins main principle of being something that can be bought and sold. At any time the roller coaster can be accelerated or decelerated. It’s own momentum is the main driving force until it isn’t. Until a switch is flipped, and the brakes / motors are turned on.”
The euthanasia roller coaster, by the way, wasn’t invented by Loomdart: the theory was first proposed by Julijonas Urbonas as a ride to kill its riders. The goal of the euthanasia roller coaster is to ensure everyone who gets on the ride at the start is dead by the end of the ride. Yes, it’s morbid.
Here’s how the euthanasia roller coaster is described:
“The Euthanasia Coaster would kill its passengers through prolonged cerebral hypoxia, or insufficient supply of oxygen to the brain. The ride's seven inversions would inflict 10 g on its passengers for 60 seconds – causing g-force related symptoms starting with gray out through tunnel vision to black out and eventually g-LOC (g-force induced loss of consciousness). Subsequent inversions would serve as insurance against unintentional survival of particularly robust passengers.”
Clearly, Loomdart sees parallels between bitcoin investment activity and the fabled euthanasia roller coaster. Just like the euthanasia coaster, bitcoin markets continue rising and falling, convincing its passengers to jump on as it goes through another loop before eventually coming back down to earth:
“Just when you think the ride is over, there’s another dump into the triangle. You go for another loop, one step closer to death. 10k could have been the breakout of the downwards trend. As could have 8.6k. As could have 7.4k. However none were. The rollercoaster continued to loop, and people continued to get murdered.”
Even A Euthanasia Roller Coaster Needs A Good Foundation
Loomdart continues the analogy by arguing that even a euthanasia roller coaster needs a good foundation. With bitcoin, the roller coaster’s foundation sits at around $6,000 – a level Loomdart calls “the $100bn price level”.
“The $100bn level holds because if it doesn’t, immense market structure is suddenly nullified. The entire roller-coaster collapses.”
Bitcoin’s price has rarely dipped below $6,000 in the last 12 months. The times it has dipped below $6,000, bitcoin is bought rapidly to prop it up above $6,000. This is why $6,000 is viewed as a crucial support level.
As long as the $6000 support level holds, the euthanasia roller coaster will continue operating. The euthanasia roller coaster doesn’t end when the $6,000 support level collapses:
“This is not how the euthanasia happens. The euthanasia happens from trying to get “higher low”. We all know it will bounce at $6000, yet we long 8000, 7000, 6600, thinking finally it’s going to make a dramatically higher bottom.Dreams are crushed as the rug is pulled out from beneath us. Yet again, the scam commences.”
What Happens When The Ride Is Over?
What happens when the mythical euthanasia roller coaster is over for the crypto community?
This is where things get interesting. According to Loomdart, the ride starts up again, and people start getting optimistic:
“The ride begins up again. People suddenly realise that the ETF will be shoehorned in through Hester Peirce’s stubbornness. Bakkt will enable bitcoin investment in a much simpler manner than even Coinbase, enabling investment products and portfolios to more easily include $BTC in their assets.”
Loomdart refers to Peirce as “CryptoMom” and claims the SEC commissioner will eventually convince her colleagues to approve the world’s first bitcoin ETF. Peirce has been making headlines across the crypto community all summer after famously dissenting from her colleagues’ decision to deny the bitcoin ETF from the Winklevoss twins.
Loomdart also sees Bakkt as a positive sign for the crypto community. Bakkt will launch a crypto on-ramp later this year, and that on-ramp will facilitate retail and institutional investor involvement in the space.
Despite these positive news stories, however, the crypto community continues to be a euthanasia roller coaster – at least according to Loomdart. That doesn’t mean crypto is going to collapse – it just means the ride will continue going around until every crypto investor dies.
It’s an interesting and controversial analogy from one of the more prominent online crypto traders in the space.