Seven days ago I read the Stone Ridge 2025 annual investor letter (a masterclass by the way).
Ross Stevens (author) made the case that Bitcoin was Venezuela's "lifeline" during hyperinflation. He quoted María Corina Machado, the opposition leader who had been forced into hiding by Maduro's regime:
“Venezuelans found a lifeline in bitcoin during hyperinflation… unlike bank wires, which the regime blocks, bitcoin donations cannot be seized”
Yesterday, Trump's military captured Maduro and flew him to New York to face drug trafficking charges.
In less than a week, Bitcoin’s thesis (as permissionless, programable money) updated in real-time.
As NYDIG posted yesterday: "Never underestimate the power of humanity's thirst for freedom. Today's the day".
This Sunday in Bitcoin Wisdom we dig into why confirmation bias is the most expensive mistake you can make in 2026 - and why updating your beliefs beats entrenching every time.
1. Update or Entrench
Confirmation bias is the worst enemy of iteration. If you only accept data that supports your hypothesis, you're not updating - you're entrenching
Back in 2024, The Atlantic published the below article, claiming that "Bitcoin “has yet to demonstrate any serious use case”.
Evidence existed: Venezuelans using Bitcoin to escape hyperinflation. Machado funding resistance with unseizable donations. An entire country's opposition movement running on a monetary network the regime couldn't control.
They didn't update. They entrenched.
Now Maduro is in handcuffs and Machado has a Nobel Peace Prize.
This is what confirmation bias costs. Not just money, but credibility, opportunity, and ultimately, the ability to see what's actually happening.
It's not just The Atlantic. Last week I showed you the 2025 scoreboard of non Bitcoin assets:
Ethereum down 12%
Solana down 29%
Avalanche down 61%
Cardano down 51%
The people still holding those bags (example above) aren't necessarily stupid, but rather they’re entrenched. They Google things like "why will ETH recover" instead of looking at the overwhelming data. They sought out narratives that confirmed what they already believed.
Entrenching is easy. Updating is difficult. That's why most people don’t do it.
2. Becoming Less Wrong Everyday
Stone Ridge calls themselves students of the "great Chicago Bayesians". The framework is simple:
Prior → Evidence → Update → New Prior → Repeat.
Every day, you become a little less wrong. But only if you actually update.
5,954 Days of Updating
The treasure hunter Mel Fisher spent 16 years searching for the wreck of the Nuestra Señora de Atocha off the Florida Keys. Every morning for 5,954 days, his mantra was the same: "Today's the day."
His prior: the treasure is somewhere off Florida.
His daily evidence: not here, not here, not here.
His update: narrower search area, refined hypothesis.
In 1985, he found $10 billion worth of treasure (predominantly silver and gold).
Fisher didn't entrench. He didn't insist the treasure was in one spot despite evidence to the contrary. He updated 5,954 times until he found it.
The $5 Billion Question
Ross Stevens at Stone Ridge applies the same framework. When his team bought $3 billion worth of natural gas wells in Arkansas, they noticed 60,000 acres of adjacent undeveloped land.
The entrenched response: "If there was gas there, someone would have drilled it".
The Bayesian response: "Why are there no drilling rigs here?"
They ran a test. Two pads, five wells. The result? An additional $5 billion in lifetime revenue.
The question "what am I missing?" is worth billions. But you can only ask it if you're willing to update (aka “challenge”) your own framework.
“They tried to bury us. They didn't know we were seeds.”
3. Your Challenge for 2026
Stone Ridge trains their team to ask one question every day:
"Was I less wrong today?"
Not "was I right?" That's ego talking.
"Was I less wrong?" That's growth.
“We would rather look dumb by asking, than not ask and be dumb. People forget if you looked dumb. They do not if you are”
Three questions for you to consider in 2026:
Q1: What belief did I entrench in 2025?
Write it down. Be specific. If you held ETH expecting a flippening that never came, own it. If you dismissed Bitcoin's use case because The Atlantic told you to, acknowledge it.
Q2: What evidence did I ignore?
Price action versus narrative. VC exit liquidity warnings. Venezuelans using Bitcoin while you debated "intrinsic value". What data was available that you chose not to see?
Q3: What belief will I actively challenge in 2026?
Pick one thesis you're confident about. Write down what evidence would prove you wrong. Then commit to watching for that evidence to play out in real time!
That's the difference between updating and entrenching. ‘Updaters’ look for disconfirming evidence. ‘Entrenchers’ avoid it at all cost.
Key Takeaways
Three truths that one can take away from the above:
Confirmation bias = entrenching. The Atlantic ignored Venezuela. Altcoin holders ignored the scoreboard. When you only accept data that confirms your beliefs, you stop learning.
Bayesian thinking = updating. Mel Fisher updated for 5,954 days. Stone Ridge asked "what am I missing?" and found $5 billion. Updaters win. Entrenchers get left behind.
The evidence is moving fast. Seven days from investor letter to a dictator in custody. If you're not updating your beliefs in real-time, you're already behind.
Entrenching feels safe, but updating is what wins in the long run.
Till next week.
- @Publius
P.S. Link to the annual Stone Ridge investor letter here (highly encourage everyone to read it as it has multiple gems of wisdom hidden in there).