Bitcoin has underperformed expectations this year by a large margin. Here is my quick take on what is happening: This topic deserves a full-length article. Until I find the time to write it, I will post a series of brief excerpts and observations. Top problems we are facing: 1- AI capital competition: AI has taken away the buzz and capital. Bitcoin was the next new thing and the "future of innovation" for the last 5 years. Now it is all about AI, which does deserve attention. If there were a thriving ecosystem of innovation on top of Bitcoin which used Bitcoin as the base layer of money (just like we're doing in the early post-COVID era), then AI innovations would have married with Bitcoin innovation and would have kept the buzz going. But for a variety of reasons, it's not happening. DATs have had an effect on this as well. 2- Inflation: Bitcoin thrives under monetary inflation and easy policy. Currently, we have CPI/energy inflation, which has the opposite effect. It slows down monetary expansion and causes a hawkish policy stance. This hurts Bitcoin. Both issues have dealt a major blow to Bitcoin's narrative for the time being. I have discussed these issue in my newsletter before this latest round of crash and not hypothesizing after the fact. The best path forward is driving real adoption. By real I mean economic value adding activities that rely on Bitcoin such as using Bitcoin for business and personal transactions (the exact thing the DAT camp is actively trying to stop) and layer 2s that are also economically useful and need Bitcoin as base. For a while LN was fulfilling this role but progress has slowed. The bitter conclusion of my thesis is that SOV use cases are not enough to drive Bitcoin anymore. Bitcoin has the potential to change lives; we shuold ensure that potential is realized.(Sina 🗝️⚡ BI Report)