The price of bitcoin crashed in January 2018 — and the chill winds of the crypto winter still blow.

Last season’s bagholders have too many bitcoins they paid way too much for. Old holders can only cash out with money from new retail suckers.

Trading volume is through the floor — and especially on the few cryptocurrency exchanges where you can still get actual dollars, and not just tethers.

The price was pumped throughout 2019 between $3,000 and $13,000 — by burning the margin traders with tethers — but without inspiring any retail interest.

Non-crypto press coverage just didn’t take the Bitcoin price rises seriously — and kept quoting people like me, who pointed out it was all burning the margin traders with tethers, and there was no evidence of the retail trading volume you’d expect if this wasn’t fake.

How to get the retail interest pumping again? Where are the fresh new suckers?

When you don’t have facts — spin narratives!

Other stuff exists — therefore, Bitcoin

Bitcoiners will seize upon anything, anywhere, as a market signal that will surely send Bitcoin up.

The price of Bitcoin went from $4000 in early April, to $6000 on 9 May, to $8000 one week later on 16 May — and Bitcoin fans treated this as only its right and natural due. Number go up!

The crypto blogs put forward all sorts of bad reasons — it’s capital flight from China! It’s Bakkt offering Bitcoin futures! It’s Flexa offering retail payments in crypto! It’s Microsoft experimenting with the blockchain!

Whatever the reason, it was surely genuine demand — people just liked bitcoins twice as much now.

Then, on 17 May, Bitcoin crashed from $7,800 to $6,178 in twenty minutes.

The narrative fails — and the bitcoiners just … never mention that one again!

Lots of narratives try to connect Bitcoin and gold — Travis Scher from the Digital Currency Group literally said the words “the narrative around Bitcoin as digital gold is growing.”

Goldbugs are aware of Bitcoin — they tend to be into Austrian economics, so they have a lot in common with bitcoiners. But not even goldbugs are convinced by the Bitcoin narrative. They want gold.

Bitcoin promoters are fond of the phrase “uncorrelated safe haven” — you should buy Bitcoin just in case. Jemima Kelly at FT Alphaville put that one into the bin a couple of weeks ago — in investing, the words “uncorrelated” and “safe haven” are a contradiction. Bitcoiners are just saying words that they think sound good.

One Forbes post from June confidently proclaimed that a combination of volatility, Facebook’s Libra and … Google searches? … would surely send Bitcoin to 66k to $100k. “I do think the next rally is going to be a lot stronger than the previous.” It turns out it wasn’t.

For November, CoinDesk tried claiming that the Federal Reserve expanding its balance sheet was definitely good news for Bitcoin. The “prominent experts” CoinDesk cited included … Twitter good-news spambot “Rhythm Trader.” CoinDesk literally cited a tweet.

As it happens, observable reality already disagreed with CoinDesk and Rhythm Trader. Alex Krüger notes that “$BTC is down 30% since the Fed started expanding its balance sheet in August.”

Here’s me with the institutional investors — they’re all just out of frame

The lack of retail trading volume — and the blatant market manipulation to burn the margin traders — completely explains the Bitcoin price.

But Bitcoin fans will still claim that trading is actually hugely busy! It’s all institutional investors, doing Over-The-Counter off-exchange trades — where you can’t see it. You can’t prove it’s not true!

CoinBase launched a pile of institution-focused products in May 2018 — “We think this can unlock $10 billion of institutional investor money sitting on the sideline,” they told CNBC.

This didn’t end up happening — because you can’t cargo-cult your way to riches.

“Institutional demand” for Bitcoin has always been a non-disprovable mirage. It’s the “God of the gaps” argument for Bitcoin — the magic is always happening some place where there’s no facts available.

Bakkt’s Bitcoin futures let you buy a bitcoin now for a fixed price, for delivery at the end of that day, or the end of that month. If the price changes in that time — you could win! The futures contracts themselves can also be traded, up to delivery.

Bakkt took this live on 23 September — and was talked up across the crypto press. This would surely unleash pent-up demand from the big money!

The exciting thing about Bakkt was that the futures were physically-settled — at the end of the contract, Bakkt would send you actual Bitcoins. And that might create demand!

After months of hype, the Bakkt futures failed to quite set the market on fire — there were a total of 126 BTC of contracts traded by 30 September. 32 BTC of this was on the first day, 23 September.

But as it happened, even with trading days like yesterday, 27 November — 4,269 BTC of contracts being traded — very little Bitcoin is actually being settled by the end of the contracts. And certainly not market-moving amounts — just 32 BTC total for October and November.

And the volume on the daily contracts — for when you just want to buy Bitcoin and have Bakkt store it for you — is usually zero.

It turns out the traders didn’t care about getting Bitcoin — they just wanted to trade the contracts themselves.

Wish harder!

If nothing else works, the crypto press will run an article from some bagholder about how Bitcoin will definitely hit $100k by the end of the year. Or the end of next year. Or 2023, maybe. Or just don’t name a disprovable date.

Bitcoin's price is going down? Remember everyone, after the FUD, news trading and manipulation clears out, we still have a global movement that's going to change the world. We will see 10k btc again and welcome 100k. Crypto is unstoppable. Crypto is the future pic.twitter.com/9vlgH4S7u2 — Charles Hoskinson (@IOHK_Charles) November 22, 2019

How will it get there? Well, it could be a … (rolls dice) … negative interest black hole. There’s the old ones, like the imminent collapse of the economy into hyperinflation. Or that fiat currencies only last for an average of 27 years — a completely false claim, you’ll be amazed to hear.

Why any of these would send Bitcoin in particular up is given — if at all — as a list of why Bitcoin ideologues like Bitcoin. They don’t really explain why anyone who wasn’t a Bitcoin ideologue would buy in.

Magic doesn’t happen

As Krüger points out: “$BTC doesn’t respond to macro variables. It is such an illiquid/fragmented market that in the absence of mass influx of new buyers, actions of a few determine direction. Micro, not macro.”

Bitcoin holders should stop believing bitcoin price narratives — they’re lies from the people who burnt you. There’s very little organic interest — the price movements are manipulation, so the whales can burn the suckers.

Narratives about Bitcoin are as widespread and worthless as the lists of hypothetical use cases. It’ll be great tomorrow!