The Last Honest Market

[0:01] Hey guys, it's Jack.
[0:03] I wrote something called the last honest
[0:05] market. I wrote it from the middle of a
[0:08] pretty painful stretch, not from the
[0:11] other side where every lesson has been
[0:13] figured out and everything's been tied
[0:15] into a neat bow. Uh it's a fairly
[0:17] vulnerable piece. It started as an essay
[0:20] about Bitcoin bear markets, but
[0:22] somewhere along the way it became an
[0:24] attempt to understand why Bitcoin can be
[0:28] both so painful and so hopeful at the
[0:31] same time.
[0:33] And why it keeps kicking my ass and why
[0:35] I keep coming back from these seasons a
[0:37] better man thanks to Bitcoin.
[0:40] So I'm going to read it in full here for
[0:42] anyone who prefers the audio or video.
[0:46] Uh and so with that being said, this is
[0:49] the last honest market, Bitcoin bear
[0:52] markets and the gifts we mistake for
[0:54] punishment.
[0:56] A note before you read.
[0:59] I wrote the first version of this essay
[1:01] on the morning of Saturday, July 11th
[1:03] before I resigned from 21.
[1:06] At the time, my plan was simple. Publish
[1:09] it first thing that Monday morning.
[1:11] On Sunday night, July 12th, my team told
[1:14] me I could not release it until after we
[1:16] publicly disclosed I was stepping down.
[1:19] So fiat, so painful, so not me, so bear
[1:23] market.
[1:24] By the time you are reading this, I have
[1:26] resigned as CEO of 21 Capital.
[1:29] I have revised it since then, especially
[1:31] this note and the language around 21,
[1:34] but I have tried not to rewrite the
[1:35] questions in light of what has happened
[1:37] since.
[1:39] These pages are about all of the
[1:40] questions that came with this bear
[1:42] market. I do not want these words to
[1:44] read like justification. I want them to
[1:47] stand on their own.
[1:48] However, pretending my resignation is
[1:50] unrelated to the season I'm describing
[1:53] would be dishonest, too.
[1:54] The The truth is that the company 21 was
[1:57] becoming and the company I believed I
[1:59] was there to build were no longer the
[2:01] same. So, I chose to step away.
[2:04] That decision does not erase my
[2:06] responsibility for helping create
[2:08] expectations that were not ultimately
[2:10] fulfilled. People trusted me. I feel
[2:12] that. I own it.
[2:15] This is not the essay where I explain in
[2:17] every detail.
[2:19] It is an essay I was already writing
[2:21] while life was forcing me to answer the
[2:23] questions underneath that decision.
[2:25] Questions about leadership, money,
[2:28] ego, conviction,
[2:30] purpose, what I am actually building and
[2:33] who I am building it for.
[2:35] I started trying to write a Bitcoin bear
[2:37] market manifesto. Somewhere along the
[2:39] way, it became more personal question.
[2:42] Why do some of the seasons that feel
[2:44] most like punishment become the ones we
[2:46] are eventually most grateful for?
[2:48] What punishments are not gifts?
[2:52] I hope that 5 years from now, with
[2:54] Bitcoin further along its path toward
[2:55] becoming the world's money, this essay
[2:57] is still worth reading because I do not
[3:00] think it was ever really about 21. I
[3:02] think it was about something much
[3:04] bigger.
[3:05] Chapter 1: Hello bear market. Hello bear
[3:08] market, my old friend. I have come to
[3:11] speak with you again.
[3:12] I take a sip of espresso on my roof. It
[3:15] is a sunny Saturday morning in Chicago.
[3:17] I check the Bitcoin price, $64,350.35.
[3:23] Then I open X war zone.
[3:25] Some of it is literal.
[3:27] Some of it is the Bitcoin community
[3:29] doing what the Bitcoin community does
[3:30] when the price is down and everyone is
[3:32] tired, angry, overexposed,
[3:35] underappreciated, and convinced someone
[3:37] else is to blame.
[3:39] Bitcoin is roughly 50% below its
[3:41] all-time high, which is mild by
[3:43] historical standards.
[3:44] I've been around long enough to see far
[3:46] worse, yet sentiment may be as bad as I
[3:49] can remember.
[3:50] That has had me thinking about why
[3:52] Bitcoin bear markets hurt so much. The
[3:54] hurt is not only financial. For me, it
[3:57] feels personal, spiritual almost.
[4:01] Because to be honest with you, I am
[4:03] getting my ass kicked right now. I am
[4:05] not writing this from the peaceful other
[4:07] side of the storm. I am still in it,
[4:09] still getting humbled, still learning
[4:12] lessons I do not fully understand yet.
[4:15] People see me as the young Bitcoin guy
[4:17] in the hoodie. Fair enough.
[4:19] But I found Bitcoin when I was 18. I'm
[4:21] writing this at 32. I have lived through
[4:23] several cycles, built companies through
[4:25] them, helped bring Bitcoin to a country,
[4:28] been celebrated, criticized, right,
[4:31] wrong, humbled, and surprised.
[4:34] 14 years in Bitcoin does not make the
[4:36] feeling disappear. A lower cost basis
[4:38] does not make you immune. Experience
[4:41] helps you recognize the weather, but it
[4:42] does not prevent the storm.
[4:45] Here's the contradiction I am trying to
[4:46] understand.
[4:48] I'm a Bitcoiner sitting in the depths of
[4:50] a bear market, getting my ass kicked,
[4:52] and somehow feeling more motivated to
[4:54] build than ever.
[4:55] It hurts. I am hopeful.
[4:57] I've been here before, and every time a
[4:59] Bitcoin bear market has stripped
[5:01] something away, I have come back a
[5:03] better man.
[5:04] Why?
[5:05] Why does Bitcoin feel so different than
[5:07] everything else?
[5:08] Why does it hurt so good?
[5:10] Why, after all of the lessons and all of
[5:13] the pain, do I keep coming back to this
[5:15] internet money?
[5:17] Chapter 2, the managed world.
[5:19] The more I sit with those questions, the
[5:21] more I think the answer begins with the
[5:23] world I was born into.
[5:25] Very little in modern life reaches us
[5:27] raw. Most of it passes through systems
[5:29] designed to soften it first. If a market
[5:32] falls too quickly, halt it. If a bank
[5:34] fails, rescue it. If debt becomes
[5:37] unbearable, refinance it. If losses
[5:40] become politically inconvenient,
[5:41] socialize them. If consequences arrive
[5:44] too quickly, delay them.
[5:46] None of these ideas are insane on their
[5:48] own. Human beings build buffers because
[5:50] life is hard. We build houses because
[5:52] storms exist, medicine because disease
[5:55] exists, and laws because violence
[5:57] exists. Civilization itself is, in many
[6:00] ways, a collection of buffers.
[6:03] The problem is not that we build them.
[6:05] The problem is when we forget they are
[6:07] buffers and begin mistaking them for
[6:09] reality.
[6:11] A system that never lets consequences
[6:13] arrive has no opportunity to teach us
[6:15] what must change.
[6:17] Take your front lawn, for example.
[6:19] A lawn does not naturally grow into a
[6:22] perfect green carpet. It grows unevenly.
[6:25] Weeds appear. Seeds travel. Weather
[6:27] changes it. Animals disturb it. Left
[6:30] alone, it becomes wild. Is mowing your
[6:32] lawn bad? No, of course not. But it's
[6:36] important we understand that a beautiful
[6:38] lawn is maintained. It is the product of
[6:40] time, labor, energy, and intervention.
[6:44] Stop spending those things and the
[6:46] smoothness disappears. You get a raw
[6:49] lawn, and just like that, your lawn
[6:51] looks like and your wife is
[6:53] furious.
[6:55] Sometimes the smoothest-looking surfaces
[6:57] require the most human intervention.
[7:00] Processed food, Photoshopped bodies,
[7:02] social media lives, modern society has
[7:05] become addicted to the edited version.
[7:08] Again, intervention is not automatically
[7:10] bad. The mistake is assuming the edited
[7:13] surface is a healthy one. A calm
[7:16] appearance can reflect strength, but it
[7:18] can also conceal a system that has lost
[7:21] the ability to survive moment movement.
[7:25] Suppressing volatility does not
[7:27] eliminate risk. It hides it. You can
[7:29] halt a market, but you have not erased
[7:32] the decisions underneath it. You can
[7:33] bail out a bank, but you have not
[7:35] repaired the hole in its balance sheet.
[7:37] You can refinance debt, but you have not
[7:40] created the productivity that would have
[7:42] justified it. You can socialize losses,
[7:44] but you have not made them disappear.
[7:47] You have moved them from the people who
[7:48] created them to the people who did not.
[7:51] The surface gets smoother, but the
[7:53] system underneath gets weaker.
[7:56] If you live inside that kind of world
[7:57] long enough, raw reality begin begins to
[8:00] feel cruel.
[8:02] A true price feels violent. A
[8:04] consequence feels unfair. A system that
[8:07] refuses to rescue you feels broken.
[8:10] Maybe that is why Bitcoin feels so
[8:12] different. The world I am used to keeps
[8:15] trying to protect me from the lesson.
[8:18] Bitcoin does not.
[8:20] Chapter 3, when pain can teach.
[8:23] Volatility is not fragility. Volatility
[8:27] is visible movement. Fragility is the
[8:29] inability to survive movement. A system
[8:32] can move violently and remain incredibly
[8:35] strong. Another can appear perfectly
[8:38] calm while becoming easier and easier to
[8:41] break.
[8:42] Volatility is simply information made
[8:44] visible. It tells you something has
[8:46] changed. Someone was wrong. Someone
[8:49] borrowed too much. Someone mispriced
[8:51] risk. Someone built something fragile.
[8:54] Something everyone believed was safe was
[8:57] not safe. In an honest system, that
[9:00] information is allowed to surface.
[9:02] Sometimes it hurts, but it is useful.
[9:05] Information allows us to correct.
[9:07] Correction allows us to adapt.
[9:09] Adaptation makes us more resilient. The
[9:12] pain moves. It arrives. It tells the
[9:15] truth and forces a response. If we
[9:18] listen, it can pass through and leave
[9:20] the system stronger than it found it.
[9:23] Managed systems offer the opposite
[9:25] trade. They suppress the signal needed
[9:28] to understand what is broken. The
[9:30] surface goes quiet while the pain grows
[9:32] underneath. Comfort is preserved, but so
[9:35] is the weakness. That is why I think a
[9:38] Bitcoin bear market can feel painful and
[9:40] hopeful at the same time. The pain means
[9:43] the signal is still alive. Correction is
[9:46] still possible. The system remains free
[9:48] enough to teach. And as much as we enjoy
[9:51] a nicely mowed lawn, there are parts of
[9:53] life where we cannot afford to silence
[9:56] the teacher.
[9:57] Chapter 4, money is not your front lawn.
[10:01] Money is not your front lawn. You might
[10:03] want your lawn curated. You might want
[10:05] your wedding curated. But some
[10:07] information is too important to curate.
[10:10] You do not want your doctor curating
[10:12] your blood work. If a scan shows
[10:14] something dangerous, a compassionate
[10:16] doctor does not smooth the image over
[10:18] because the truth might upset you. The
[10:20] truth may scare you. It may change your
[10:22] life, but it is also what gives you the
[10:25] chance to respond. Some information is
[10:28] too important to manipulate. Money
[10:30] belongs in that category. Money is one
[10:33] of the most important information system
[10:35] civilization has ever created. It allows
[10:38] strangers to cooperate, value to move
[10:40] through time and across space, and
[10:42] billions of people who will never meet
[10:44] to coordinate their lives. It tells us
[10:46] what people value, what is scarce, what
[10:49] is abundant, what should be built, what
[10:51] should stop being built, where energy
[10:53] should flow, and where it is being
[10:55] wasted. Unlike a patch of grass, money
[10:58] is deeply personal. It is your labor,
[11:01] your sacrifice, your judgment, your
[11:03] risk, your deferred gratification, your
[11:06] time. It is your life abstracted into a
[11:09] form that can move through the world
[11:11] after you have spent it. Money is
[11:13] information. Money is dignity. When
[11:17] money lies, civilization begins
[11:19] responding to false vital signals.
[11:22] People build the wrong things. They
[11:24] chase the wrong incentives. They mistake
[11:26] leverage for genius, asset inflation for
[11:29] productivity, liquidity for wisdom, and
[11:32] a calm surface for a healthy system. You
[11:35] blink and an official-looking
[11:37] institution is telling you Lucky Charms
[11:39] are healthier than steak. The signal
[11:42] broke somewhere. You want to manipulate
[11:44] the patch of grass in front of your
[11:45] house? Fine.
[11:47] But when you manipulate money, you
[11:49] manipulate the information human beings
[11:51] use to organize their lives. That cuts
[11:54] into human dignity itself. I think that
[11:57] is why Bitcoin grabbed me when I was 18.
[12:00] At the time, I thought my dad had found
[12:02] a weird but interesting investment. I
[12:04] had not gone deep enough. What I had
[12:07] actually found, and what we are all
[12:09] still building, is a monetary system
[12:11] that refuses to give the world a more
[12:13] convenient answer. No government, no
[12:16] central bank, no bailout committee, no
[12:19] politician, no CEO, no board of
[12:22] directors, no one standing between
[12:24] reality and the ledger. No one deciding
[12:27] today's truth had become too
[12:29] uncomfortable.
[12:31] Bitcoin propagates. Bitcoin validates.
[12:34] Bitcoin settles. No matter what,
[12:37] tick-tock, next block. Bitcoin does not
[12:41] create truth. It exposes the truth
[12:43] regardless of who wants it hidden.
[12:46] Freedom, I am beginning to realize, is
[12:48] not the absence of pain. It is the
[12:51] absence of an editor. So what happens
[12:53] when money, the information system that
[12:55] coordinates society, is free enough to
[12:58] tell the truth?
[13:00] Chapter five, the raw feed. In my
[13:03] experience, honest money makes the world
[13:06] feel bigger, more colorful, more alive.
[13:09] The upside becomes larger than anyone
[13:11] imagined. So does the downside. For most
[13:15] of our lives, we experience a version of
[13:16] reality that has already been processed.
[13:19] The rough edges are sanded down, the
[13:21] sharp corners rounded off, the
[13:23] consequences delayed. Bitcoin hands you
[13:25] the raw feed. Sometimes it is
[13:28] breathtaking. Sometimes it is
[13:30] horrifying. Usually it is both. I know
[13:33] because I have lived both. After 14
[13:36] years, this feels as close to science as
[13:39] anything that I know. However good you
[13:41] think a Bitcoin bull market can get, it
[13:43] can and will get better. However bad you
[13:47] think a Bitcoin market can get, it can
[13:49] and will get worse. No one gets to stand
[13:53] in the way.
[13:54] I thought Bitcoin could change lives. I
[13:56] thought it could build companies, create
[13:58] financial infrastructure, and give
[14:00] people a better way to save. I never
[14:04] imagined I would help introduce it as
[14:06] legal tender in El Salvador. Can you
[14:08] believe that happened? An open-source
[14:11] money with no headquarters, no CEO, no
[14:14] board, and no central planner became
[14:17] legal tender in a country. Nobody
[14:19] ordered that future into existence. No
[14:22] committee had to approve it.
[14:24] People recognized something valuable and
[14:26] moved toward it.
[14:28] Hope does not ask permission.
[14:32] That is the breathtaking side of a free
[14:34] and honest system. Hope, love,
[14:37] connection, ambition. When an idea's
[14:40] time has come, possibility can travel
[14:43] farther than anyone imagined. The
[14:46] horrifying side works the same way.
[14:49] Take the 2022 bear market. I thought it
[14:52] would be painful. I expected prices to
[14:54] fall, companies to struggle, and easy
[14:56] money to disappear. I did not expect one
[14:59] of the largest exchanges in FTX to turn
[15:02] into a multi-billion dollar fraud.
[15:04] Looking back, I probably should have. I
[15:06] knew Sam was full of But the point
[15:09] is bigger than Sam. Honest systems
[15:11] eventually reveal what was hidden. They
[15:14] reveal leverage, weak balance sheets,
[15:16] fake business models, confidence
[15:19] borrowed instead of earned, and stories
[15:21] that worked only while prices were
[15:23] rising. People often say bear markets
[15:26] destroy things. I do not think that is
[15:28] quite right. Bear markets reveal things.
[15:31] The destruction happened earlier. The
[15:33] bear market removes everyone's ability
[15:36] to pretend otherwise. Bitcoin did not
[15:38] create the fraud. It eventually refused
[15:41] to keep lying about it. It did not
[15:43] create the leverage. It stopped
[15:45] subsidizing it. It did not create the
[15:47] weak business. It stopped allowing easy
[15:50] money to disguise it. The truth was
[15:52] always there. The filter disappeared.
[15:55] Bear markets do not just mark down
[15:57] portfolios. They mark down stories.
[16:00] Stories about who they thought they
[16:01] were, how smart they thought they were,
[16:04] what they thought would always work,
[16:07] what success was supposed to look like.
[16:09] Bull markets tell us stories we would
[16:11] like to believe. Bear markets ask which
[16:15] of those stories are true. And
[16:17] eventually, Bitcoin turns that question
[16:20] toward you.
[16:22] Chapter six. The market introduced me to
[16:25] myself.
[16:27] I know all of this because I have lived
[16:28] it many times. In 2022, at the Bitcoin
[16:32] conference, I announced products that
[16:34] never made it to market. At the time, I
[16:36] believed I was doing what founders are
[16:38] supposed to do. Paint the future,
[16:40] inspire people, show conviction. There
[16:43] is truth in that. Founders need
[16:45] conviction. They should see around the
[16:47] corners and build things customers do
[16:49] not yet realize they need. But there
[16:51] were other truths hiding underneath that
[16:53] one. Truths I could not see while
[16:55] everyone was clapping.
[16:57] I had started confusing momentum for
[16:59] competence, attention for proof of work,
[17:02] vision for execution. I had become more
[17:04] interested in announcing than shipping.
[17:08] That sentence still hurts to write.
[17:10] Good. It should.
[17:13] It was true.
[17:14] The market did not humiliate me. It
[17:16] introduced me to myself. The bull market
[17:19] convinced me I was right. The bear
[17:22] market forced me to become useful.
[17:24] That is still the most honest sentence I
[17:26] know how to write about my life in
[17:28] Bitcoin.
[17:29] And now,
[17:31] here I am again. This week I stepped
[17:33] down as the CEO of 21, a company that I
[17:36] helped start.
[17:37] The path the company was taking and the
[17:39] one I believed in had diverged, so I
[17:41] chose to step away.
[17:43] That is my side of the decision, not the
[17:45] whole story. People believed in what I
[17:47] said we were going to build. The outcome
[17:49] was not what I told them it would be.
[17:52] There were decisions I could have made
[17:54] better, and I own that.
[17:56] This is not where I explain in every
[17:58] detail, but pretending the resignation
[18:00] is separate from the bear market I am
[18:02] describing would be disingenuous.
[18:04] It is part of the weather.
[18:06] It is one of the ways reality is asking
[18:08] me whether I am who I say I am.
[18:12] When the easier, more lucrative path was
[18:14] placed in front of me, I felt myself say
[18:16] no before I could fully reason it out.
[18:19] Not in a heroic way. Rather, I had spent
[18:22] years saying that some things are simply
[18:25] not for sale.
[18:27] This was a rare time where I had to find
[18:29] out whether I meant it.
[18:31] Different circumstances, different
[18:33] mistakes, different lessons, somehow a
[18:36] similar feeling. I am getting my ass
[18:39] kicked. Right now, I do not know exactly
[18:42] where this season is trying to take me
[18:44] and what it is trying to teach me.
[18:46] I have some ideas, but I have learned
[18:48] not to rush toward a clean answer simply
[18:51] because uncertainty is uncomfortable.
[18:53] I know it is asking me questions I
[18:55] cannot yet answer. I know it is
[18:57] stripping away another layer of ego.
[19:00] I know I will not leave it exactly as I
[19:02] entered it. Hopefully, I will leave
[19:04] better.
[19:06] That is what keeps surprising me. The
[19:08] pain has never been for nothing. Every
[19:11] time I have let Bitcoin finish the
[19:13] lesson, I have come back more useful,
[19:15] more discerning, and harder to break,
[19:18] and so has what I build.
[19:21] Chapter 7 What punishments are not
[19:24] gifts?
[19:25] As I reflect on all of this, on living
[19:27] inside a sit a system honest enough to
[19:30] deliver pain, lessons, and truth, I keep
[19:33] returning to a strange question. If I
[19:35] could make Bitcoin easier, would I
[19:38] If I could remove the bear markets,
[19:40] smooth away the volatility, and mute the
[19:42] pain, would I? A younger version of me
[19:45] would have said yes in a heartbeat.
[19:47] Today, I honestly do not think I would.
[19:50] It's not that I've learned to love pain.
[19:52] In fact, pain does not automatically
[19:55] improve anyone. Hard times reveal what
[19:58] is weak. Whether those revelations
[20:00] become strengths depend on what we do
[20:02] next. I would not make Bitcoin easier
[20:05] because to do that, I would have to give
[20:07] someone the power to interrupt the
[20:09] lesson whenever the answer became too
[20:11] painful. I would have to let the world
[20:13] change Bitcoin whenever Bitcoin's answer
[20:16] became too painful. And then Bitcoin
[20:18] would become just like everything else.
[20:21] I would have to erase the moments that
[20:22] embarrassed me, the moments that humbled
[20:24] me, the moments that forced me to listen
[20:27] instead of perform, the moments that
[20:29] made me useful. I would have to erase
[20:31] the parts of my life that shaped me into
[20:33] someone I respect more today than I did
[20:35] yesterday. I would never have chosen
[20:38] those punishments, but I would never
[20:40] give back the gifts.
[20:43] Now I understand why this hurts so good.
[20:45] Bitcoin refuses to bend to our comfort.
[20:48] It forces us to bend toward reality. We
[20:51] cannot force it to rescue our leverage,
[20:53] protect our ego, preserve a false
[20:55] business, or validate the story we told
[20:58] ourselves while prices were rising.
[21:00] Bitcoin can change the world because the
[21:03] world cannot change Bitcoin. We are not
[21:06] the authors of reality. We are
[21:08] participants in it, children of nature,
[21:10] not its masters. Bitcoin is money built
[21:14] on that humility.
[21:15] Maybe that is why the pain feels
[21:17] strangely hopeful. The pain is real, but
[21:20] so is that freedom.
[21:22] There is no one editing the answer.
[21:24] There is still something here capable of
[21:26] correcting us.
[21:27] Think about the people you respect most.
[21:30] A coach, a parent,
[21:32] >> [clears throat]
[21:32] >> a spouse, a friend, a mentor.
[21:35] Did they earn your respect by protecting
[21:37] you from reality or by caring enough to
[21:40] tell you the truth?
[21:42] Truth is not always comfortable, but
[21:44] truth is respectful. It says, I believe
[21:47] you are strong enough to handle the
[21:49] world as it is.
[21:51] Bitcoin does not promise to be nice to
[21:53] us. It respects us enough to tell us the
[21:55] truth and gives us the chance to become
[21:58] better.
[21:59] Chapter 8, back to work. I finish my
[22:02] espresso as my fiance walks onto the
[22:05] roof to show me the florals for our
[22:07] wedding.
[22:08] I say, "No. We do not want a managed
[22:11] wedding, a smoothed over wedding. We
[22:13] should not mow the lawn. We should let
[22:15] it grow and allow the wedding to express
[22:18] its natural truth." She looks at me.
[22:21] "What are you talking about?" I chuckle.
[22:24] Good question.
[22:26] I check the price one more time. Bitcoin
[22:28] is still down. The internet is still
[22:30] screaming.
[22:31] Nothing out there has changed. Only me.
[22:34] The pain is still real. So is the hope.
[22:37] I close X. The market is still speaking.
[22:40] Reality is still getting through. Good.
[22:43] The signal is still alive.
[22:45] I do not understand everything the bear
[22:47] market is trying to give me. There is no
[22:48] guarantee I ever will. But Bitcoin has
[22:51] taught me not to interrupt the lesson
[22:53] before it has finished its work. My job
[22:55] is to listen, look in the mirror, and do
[22:58] the work.
[22:59] That is why I am hopeful while I hurt.
[23:02] We still have money free enough to tell
[23:03] us the truth.
[23:05] And truth powerful enough to change us
[23:07] for the better.
[23:08] Tick-tock, next block.
[23:11] Back to work.
[23:14] The end.
[23:16] Thank you guys for listening.
[23:17] I'll catch you on the internet.