Bitcoin and Reflexivity: a step back from the charts

George Soros' general theory of reflexivity states that investors don't base their decisions on reality, but rather on their perceptions of reality. I will attempt to apply this theory to the Bitcoin asset bubble.

First, assume that Bitcoin is in a positive reflexive feedback loop. There are two components to this: an underlying trend that prevails in reality, and a misconception relating to that trend.
Here, the trend and the misconception positively reinforce each other and the trend tends toward a dynamic disequilibrium.

In the case of Bitcoin, the trend is its inflating value and the misconception is its public perception as a viable store of value (SoV).
The relationship between Bitcoin's inflated market value and its perception as a SoV is reflexive, so they positively reinforce each other to further drive up the price of Bitcoin.

I think this narrative is driven largely by inflation expectations. If the fear of hyper-inflation eases, this trend and misconception will positively reinforce each other back toward equilibrium. If inflation expectations continue to rise, bitcoin will continue to inflate in value indefinitely.

Reflexivity also suggests that it is rational to invest into an asset bubble in a positive reflexive feedback loop. I, therefore, think it is well justified to be in Bitcoin (and crypto assets as a whole) until the trend shows signs of reversing.