I started with a slogan I liked too much. Watching a memecoin with no product, no cash flow, and no roadmap trade billions of dollars in a week, I wrote in my notebook: when there is no anchor to check against, propagation alone determines value; crypto is the degenerate case of narrative economics, where the story simply becomes the fundamentals. It felt sharp. It felt quotable. And most of what follows is me taking that sentence apart, because on closer inspection it is half right and half a piece of laziness I should not let myself keep.

The dichotomy was wrong before I even started

The framing “story versus fundamentals” assumes the two are different kinds of thing — that a price is really about earnings, and narrative is the noise that pushes it around. Stack three old ideas on top of each other and that assumption falls apart.

Start with Keynes. In Chapter 12 of the General Theory (1936) he compares the stock market to a newspaper beauty contest where you win not by picking the face you find prettiest, nor even the face you think others find prettiest, but by anticipating what everyone else expects the average guess to land on.1 Price is a higher-order belief about other people’s beliefs. This is not a pathology of speculative bubbles; it is the ordinary condition of every market. Fundamentals never set the price directly. They enter only through what people believe others believe about them.

So what are fundamentals actually doing? Here Matthew Shaffer’s work sharpened my thinking. He argues that audited accounting reports function as Schelling points — focal answers that everyone anchors on precisely because everyone expects everyone else to anchor on the same number for the same reason. In contested valuations like mergers and bankruptcies, he finds parties gravitating to trailing multiples of reported figures even when everyone knows forward-looking measures would be more accurate, and this pull is strongest exactly where the coordination problem is most acute.2 The power of a fundamental is not that it is the value. It is that anyone, independently, can recompute the same anchor.

And then the vertiginous third step: money itself is a Schelling point. Nick Szabo’s essay “Shelling Out” (2002) traces value back to proto-money — shell beads, rare carvings — that held their worth through what he calls unforgeable costliness, an object hard enough to fake that everyone could trust everyone else would keep accepting it.3 You take the token because you believe others will. Bitcoin’s proof-of-work is the digital version of that same property.

Put the three together and the tidy opposition dissolves. Fundamentals and stories belong to the same genus — both are devices for bundling higher-order beliefs into a shared focal point. The only thing that separates them is whether the focal point has an external verification anchor attached.

The anchor, not the story

This reframing is the whole payload. A discounted-cash-flow model is a story with an auditable anchor: the price can be wrong, but earnings are an external reality that eventually drags belief back toward itself. A memecoin is a Schelling point with the anchor cut off. There is no external reality that can correct its price — which means, strictly, there is no wrong price, because there is nothing the price is supposed to be true about.

That last sentence is where economics quietly becomes epistemology. A market price is an aggregated belief. In an anchored market that belief is tethered: it can drift, but an outside check — the quarterly report — pulls it back. Cut the tether and the only forces left moving the price are the contagion of belief (Shiller’s epidemiology of narratives)4 and the self-fulfilment of belief (Soros’s reflexivity, where believing a thing makes it truer, which reinforces the belief).5 The truth-value term drops out of the equation entirely. This is not “we cannot verify what is true.” It is the stranger condition of there being no fact of the matter to verify. An information-integrity problem taken to its degenerate limit.

Shooting my own slogan

So the reframing survives. But my original sentence — propagation alone determines value — does not, and I think it is worth being explicit about why, because narrative economics is notorious for exactly the vice of making claims too slippery to ever be wrong.6 Three pieces of evidence kill the strong form.

First, the causation runs both ways. Studies of social-media chatter and asset prices find they Granger-cause each other; the arrow is not story-to-price but a loop.7 That is reflexivity, not narrative determinism. “Propagation alone” smuggles in a one-way arrow the data refuses.

Second, identical stories do not produce identical value. Bitcoin’s forks — Bitcoin Cash, Bitcoin SV — inherited nearly the same technology and a nearly identical origin story, yet as of mid-2026 Bitcoin’s market capitalization runs into the trillions while its forks sit at fractions of a percent of the total market.8 If the story were doing all the work, the near-copies would be near-equals. They are not, because a non-narrative anchor is real: salience, or the Lindy effect — whatever has been the focal point longest is the most stable focal point. Being old is itself an anchor.

Third, watch what the market is saying about itself right now. In 2026 the loud consensus is that crypto has grown up — “substance over speculation,” Bitcoin as a macro anchor, Ethereum as productive digital capital with real fee revenue.9 But notice what that discourse is: a story announcing the end of story-driven pricing. It gets deployed precisely because “there are fundamentals now” is the most effective focal point for coordinating the next wave of institutional money. Even the narrative of escaping narrative is a Schelling point.

So the honest conclusion is not “story equals value.” It is smaller and, I think, truer: losing the external anchor does not make the story omnipotent — it removes the mechanism that corrects error. The story remains bound by salience and reflexivity; what vanishes is anything that could ever say the price was wrong. Degeneration is not the triumph of narrative. It is the deletion of the correction loop.

What I still don’t know

Is Ethereum’s fee-burn a genuine cash-flow anchor, or just a more sophisticated focal story? There is a clean empirical test hiding here: hit the asset with a large narrative shock and watch whether the price snaps back toward some cash-flow value or simply drifts to a new focal point. If it snaps back, the anchor is real and Ethereum has left the degenerate zone. I don’t yet know which way that goes.

Can salience be quantified — can “duration as a focal point” be measured against price stability, using the fork families as a control group? And the question I find most unsettling: if the “maturity” narrative is self-fulfilling — if institutional money arrives, real usage grows, and an anchor genuinely forms — then anchors can be grown by story. The focal point comes first, the fundamentals accrete later. That would rhyme uncomfortably well with Szabo’s own account of collectibles slowly hardening into money. Maybe the anchor was never the starting condition. Maybe it is always something a story earns.

  1. Wikipedia. “Keynesian beauty contest,” summarizing J.M. Keynes, The General Theory of Employment, Interest and Money (1936), Ch. 12. Accessed 2026-07-07. ↩

  2. Shaffer, Matthew. “Contentious Valuations: Accounting Reports as Schelling Points.” SSRN working paper. Accessed 2026-07-07. ↩

  3. Szabo, Nick. “Shelling Out: The Origins of Money” (2002). Accessed 2026-07-07. ↩

  4. Shiller, Robert J. “Narrative Economics.” AEA Presidential Address, American Economic Review 107(4), 2017. Accessed 2026-07-07. ↩

  5. ByteTree. “Reflexivity: Nothing Does It Like Bitcoin” (2021), on George Soros’s theory of reflexivity. Accessed 2026-07-07. ↩

  6. Cato Institute. “Narrative Economics,” Regulation (Winter 2019–2020) — critique of the framework’s falsifiability. Accessed 2026-07-07. ↩

  7. Aslam et al. / npj Complexity. “Bidirectional Granger causality between social-media narratives and asset prices,” npj Complexity (2025). Accessed 2026-07-07. ↩

  8. CoinMarketCap. “Bitcoin Dominance” and market-cap listings for Bitcoin, Bitcoin Cash, and Bitcoin SV, as of 2026-07-07. Accessed 2026-07-07. ↩

  9. Coinmonks. “Crypto Narratives 2025–2026: Substance over Speculation.” Accessed 2026-07-07. ↩