Last week, a friend was worrying about the US's GENIUS Act stopping interest on stablecoins. I also spent some time looking at my "other" investment stuff - a stocks and shares retirement fund. Those two things made me think about consensus.
I'm not talking about crypto consensus in the sense of mining, where blocks are created based on decentralised processing that reaches a consensus of truth. I'm talking about consensus of opinion, and how it moves all the markets, how it decides what's successful and what isn't, how it determines rules and regulations.
When you're researching a crypto, considering an investment or trade, you may think it sounds awesome. You may think it solves a real-world problem in an incredibly brilliant way. But unless other people think that, it ain't going anywhere.
And if people do agree and the project gains popularity, someone will copy it (or multiple people will) and you're stuck trying to figure out which one's going to actually go somewhere, which one will stick around, which one will get the backing it needs. Consensus will decide that, too, though it may change direction completely.
In the markets (both TradFi and crypto), there's technical analysis and looking at company/coin fundamentals to help inform investors, but in the end it comes down to one question: do most people think the price will rise? Then it probably will.
A whale drops $350,000,000 into BTC and the price goes up. That's also consensus because that amount doesn't really move the price much. It's the other people seeing that buy and deciding that they agree that this is a good time to buy that really moves it. Consensus again.
You want an example that's closer to home?
Look at how I chose my '26 Picks. I read 15 articles, counted how many times each choice appeared, double-checked they weren't oddities and added them to the list.
Consensus.
An example covering why the GENIUS Act made me think of it?
If US exchanges stop offering interest on stablecoins, people will move their crypto to exchanges outside the country because they want to earn on their money. That will force US exchanges to find a way around the law's definitions to continue offering what people agree they expect from an exchange.
Consensus.
That's why the FaG Index is such a great indicator (though it's always in hindsight) and why prediction markets are such a big deal. Enough consensus early enough and you can make a killing.
Yeah, I know, this was just a brain dump. Back to your normal programming on Sunday (and next week I'll be looking at Banking again).
