Today, the S&P 500 experienced an extreme event. During the #FOMC press conference, the #SPX briefly exceeded the Bollinger Bands' +3 standard deviation on the daily timeframe. This event rarely occurs, and only occurs during extreme market optimism. The #VIX did not confirm the higher move-up as it created a higher low over yesterday's trading session while the #SPX created a higher high. The last time this type of divergence occurred was 6 years ago in November 2017, about two months before a significant #volspike (VIX went to 50). The current S&P 500 environment remains consistent with the end of a business cycle when the Fed stops tightening and the market believes a soft landing has been accomplished because the ensuing recession has not yet started. More often than not the #SPX reaches new ATHs during this period. So far in December, the VIX futures term structure remains in deep contango and the yield curve remains deeply inverted, both of which further confirm that we're at the end of a business cycle. An economic #recession is likely to begin in the U.S. by the end of 2024. It will likely be stagflationary with inflation remaining high even as demand continues to cool.

In the digital age, the emergence of smart contracts has created the ability for governance to become decentralized to a degree not possible previously. Smart contracts -- through their algorithmic immutability -- mitigate the problem of corruption, which has plagued centralized governance since its inception. No longer must personal biases impact the output that some input receives. Yet, smart contracts are not without their own vulnerabilities. Each time a smart contract vulnerability is exploited, this act -- however benevolent or malicious the actor -- improves upon the underlying design of the smart contract, thus making it more secure. In so much as Bitcoin, Ethereum, and other decentralized protocols are displacing centralized fiat currencies, the decentralized protocols that are built upon them are displacing centralized governance structures, from decentralized social media (Nostr) to decentralized organizations (DAOs). Some might argue this is the natural progression of human evolution. However, is there ever a case where total decentralization can be detrimental?

After using #Nostr for several weeks, one thing that has taken me by surprise is how there are very liberal and very conservative people on here, and yet they both share a sense of community and don't spend all day posting content against each other. Despite differences in political persuasion, they find common ground on here. Now that I've seen this, I better understand how dangerous centralized control of social media is -- where algorithms continuously drive inflammatory content to users to keep them addicted to the platform. I find it ironic that a censorship-resistant platform is largely devoid of much of the inflammatory content that's present on censorable social media. One may have thought the opposite would be the case.

A lot of people fail to realize this, but the price of Bitcoin in U.S. dollars is, in many ways, a real-time chart of de-dollarization. The price of Bitcoin only goes up (when priced in dollars) because people are trading in dollars for Bitcoin. Those who trade dollars for Bitcoin with no intent to sell that Bitcoin for the foreseeable future ("#hodlers") are, by definition, abandoning the dollar. Furthermore, the #LightningNetwork is creating a major market of #V4V exchange in which the dollar is no longer the unit of account. The unit of account is Bitcoin. People are increasingly exchanging goods and services for sats, the smallest unit of Bitcoin. This is de-dollarization.

The market cap of #Tether is about to reach 4x that of USD Coin as the two stablecoins enter a second year of diverging market capitalization. $USDT / $USDC / #Stablecoins

As we approach the close of the year, it's important to remember that the 10y/3m yield curve is still inverted. It has been continuously inverted for over a year, which is the longest period of continuous inversion on record. What this is likely warning is that not only is a #recession coming, but that it will likely last a long time. It's always during the phase between when the central bank stops hiking rates and the start of the recession that it feels like a soft landing has been achieved.

The fiat system will die once workers demand #Bitcoin for their labor.

The Lightning Network and other L2 protocols are essentially analogs of financial derivatives in the #tradFi space, except they're far more efficient and resilient to liquidity crises by design. Traditional financial institutions have always struggled to measure counterparty risk. Corruptible credit rating agencies, on which traditional financial firms rely, are a fallible means to measure counterparty risk. De-fi protocols are public, transparent, auditable, and trustless. In a trustless system, there need not be a dependence on credit rating agencies to measure counterparty risk. As such, de-fi protocols introduce a more efficient financial infrastructure. In the years and decades ahead, decentralized finance is going to outright replace #tradFi. Those who try to stop it will be faced with trying to stop the wheels of human evolution from turning.

I've studied Bitcoin's price action for years and it is my strong belief that the most plausible course for its future price action is some variation of the hyperbolic growth model. The extreme parabolic move will begin when hyperinflation sets in for fiat currency and central banks begin to adopt a Bitcoin standard.