A Lesson in Bitcoin Volatility with Dan McArdle - WBD510

Dan McArdle is co-founder of Messari Crypto and creator of
casebitcoin.com. Dan has been in Bitcoin since 2011. In this
interview, we discuss the history of Bitcoin cycles and events:
Mt. Gox hack, rise of altcoins and stablecoins, Ethereum DAO
Hack, and 2017 Bitcoin cycle.


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Bitcoin is volatile: its history has been dominated by large
swings in both directions; albeit, Bitcoin is volatile to the
upside: in 10 years it is up well over 500,000%! But, in each
cycle, new adopters can be forgiven for thinking they’re in the
cycle that finally breaks the pattern. It is easy to question the
investment when seeing the value drop by 80% for the first time.


This is where experience is vital. Each cycle has seen events
that have had the potential to destroy Bitcoin. Exchange hacks
and exploits, the proliferation of competing coins with marketing
buzz aimed at attacking Bitcoin, the realisation of altcoin
failings, scams, bans, FUD. The most recent has been the UST and
Luna crash. Each one destroys confidence and value.


Yet, the one thing the critiques fail to mention is that each of
these events has been external to Bitcoin. Each event has
highlighted weaknesses in innovations in the ecosystem that has
developed around Bitcoin. But Bitcoin has remained secure - the
protocol itself has not been hacked. In fact, the “move slow and
build things” ethos has strengthened through each event.


This is why long term hodlers who have served one “tour of duty”
(a four year Bitcoin cycle) are more inured to Bitcoin’s
volatility. They have experienced Bitcoin being declared dead,
only to reemerge stronger and more resilient. What hurts you can
make you stronger.


To look forward and speculate about the future it is therefore
important to look back and see where we’ve been. Many believe
Bitcoin is a paradigm shift not just because of ideology, but
because the technology has been repeatedly tested and passed.
That’s why it is being considered as an emerging global macro
asset.