[ajross]

> At a logical level, Bitcoin should be decorrelated from stocks

I don't see how you get to that logic. BTC is a speculative growth asset held by the same people who speculate on securities, and for the same reason. In fact by virtue of being "pure" speculation, it should be expected to be even "stockier" than stocks! You don't buy bitcoin to influence corporate governance or derive dividend income. The only reason anyone purchases crypto is to sell it later at a higher price.

So if you need to dump an asset to backstop other debts, it's going to be your crypto wallet you reach for first. It'll crash harder, almost by definition.

[mindcandy]

There are at least two reasons to buy Bitcoin:

1. You need it for use as a collateral asset for smart contracts. There are no crypto cops or crypto courts. Only collateral gives contracts teeth. There are many options here. Just like there are many options for collateral assets in traditional finance. But, BTC is the top dog for the role and the first choice of individuals and institutions trying to lay down the foundations of decentralized finance.

2. You are speculating that the growth of BTC's growth in value as a collateral asset will outpace the growth of other assets. This as played out well over the past decade.

[ajross]

So, #2 is exactly what I said, just fancy. I agree, people bet on BTC's growth. That's what speculation is. But your causality is circular: people betting on BTC/USD because it's grown in the past is literally the definition of "pure" speculation.

But #1 simply isn't correct. Yes yes yes, I've read all the kool aid papers too. But the amount of crypto held as a "collateral asset for smart contracts" is effectively zero. BTC, in practice, just gets parked. Most wallets never trade at all.