The idea of holding (or “never sell your cryptos”) of the defenders of #Bitcoin and cryptos shows ignorance about what in Game Theory is typified as a Guaranteed Game with 2 equilibria: the “bad” one, characterized by the predominance of the risk-minimizing strategy at the individual level, and the “good”, “optimal” or “ideal” one, which, although Pareto superior for the cryptocommunity, is clearly more risky at the individual level, so that at the end the “bad” equilibrium prevails (i.e. the one that minimizes risks for the individual).
Asking people en masse and simultaneously to “hold” positions in #Bitcoin, when selling at $69,000 would have rescued more capital at the individual level, was unsustainable nonsense. People are now getting out of positions, since self-interest overcomes common interest.
#Bitcoin advocates believed that the common interest (the cryptocommunity) would outweigh self-interest (the investor’s pocket), and they were wrong. Now the “every man for himself” strategy reigns. It seems that crypto advocates did not read Adam Smith or John Nash.
The discourse of the cryptocommunity is inconsistent. They first make it clear that #Bitcoin will violate the Classical Political Economists’ Law of One Price, promising that it would rise in terms of fiat money and commodities forever; and now when it falls they ask not to sell.
For the “good” equilibrium to prevail, which for the cryptocommunity would mean maximizing individual and social utility, the risk of everyone selling and no one buying should be perceived as low. Only then the optimal strategy for the individual would be not to sell. But that is not the case, since there is no mechanism for intervention or management of expectations.
Specifically, there is no market maker that guarantees a floor or minimum price for #Bitcoin and crypto below which it simply cannot fall. The latter, all the more so now that the FED’s Quantitate Easing program has come to an end. Clearly, this is not the case for fiat money and quasi-money. On the contrary, fiat money has as its floor the demand for money to pay taxes and Treasury Bills the daily action of the Fed’s own Monetary Policy Committee, when it sets its price or, rather, its inverse: the rate of interest.
So let’s not expect individuals in the cryptocommunity to think of it first than themselves. Every man for himself!
En , pero sobre todo en , discuto sobre estos temas, al igual que sobre cómo conformar portafolios en el contexto arriba descrito.