NO WAY! Conventional thinking renders this proposition—the most extraordinary claim made for cryptocurrencies—as preposterous. Massive, powerful interests are vested in the perpetuation of state control through national currencies—with the US dollar presently being the global fulcrum.
Martin Armstrong asked rhetorically if “anyone really believes that governments will just relinquish power willingly?” Armstrong stated that he “knows for a fact that they have allowed bitcoin and other cryptocurrencies to exist in order to condition people into accepting the end of paper money.”
While this phase of crypto growth unfolds, regulators appear to be looking the other way. One reason for this is that powerful people and financial institutions are buying bitcoin, with influential individuals in the market profiting from this protection. Jay Clayton’s replacement as SEC Chairman is Gary Gensler, who is crypto-knowledgeable and even more crypto-friendly.
YES, IT’S POSSIBLE. On the other hand, we’re living in unprecedented times. If Armstrong is right, we are in year one of a ~twelve-year period of unprecedented turbulence in America. No one can predict what civilization will look like when this transformation is over… and that includes the composition and structure of the world’s currencies.
A significant slice of generations “X” & “Y” (ages 24-56) identify more strongly with cryptos than precious metals as a store of value. Predictions from such glassy-eyed crypto proponents as Jeff Berwick and Max Keiser are being vindicated. And the world’s sometimes richest person, Elon Musk, just climbed onboard.
Continuing the trend identified in the bitcoin article I published in December, billions of institutional dollars continue flowing into BTC. Organizations buying or adjusting operations to accommodate bitcoin include Visa, PayPal, BNY Mellon Bank, Bakkt, Greenpro Capital and MicroStrategy. Giant funds BlackRock and Bridgewater are considering adding cryptos. Jack Dorsey’s Square has been buying bitcoin and has now opened an online bank. Employers have begun allowing employees to receive salary in BTC.
In December, a single order from Greyscale consumed more than twice (72,500) the number of bitcoins produced (28,112) that month by miners—generating a supply shortage that could only be filled by purchasing coins from existing holders, at higher prices.
Wall Street is clearly along for the ride – and will know when to get out. But they wouldn’t be expending this much energy getting involved unless the ride was going to be worth it.
Citibank described bitcoin as at a “tipping point, with a host of risks and obstacles” standing in the way of further progress. However, if businesses and individuals gain access via digital wallets to planned central bank digital cash and so-called stablecoins, bitcoin’s global reach, traceability and potential for quick payments would see it “optimally positioned” to become the preferred currency for international trade. BTC’s future could also be a “speculative implosion.”
By way of review, cryptocurrency technology is
- Open-sourced and peer reviewed. Any person, anywhere, at any time can review and test the code.
- Decentralized and resistant to censorship – not subject to a single point of failure.
- Cryptographically secure, as reviewed by peers around the world.
Bitcoin is private and free market, a secure long-term store of value, and a sovereign form of money that allows individuals to conduct permissionless transactions. It operates outside the banking system with the potential of becoming the ultimate offshore bank account. And although you cannot hold it in your hand like gold, it’s just as scarce, and a lot more convenient. So why shouldn’t it complement or even replace gold as the ultimate store of value?
WHAT TO DO. Even though bitcoin’s rise has been extensive, it appears to have plenty of profitable road still ahead. At this point, only 10% of Western world inhabitants are invested. We recommend:
- Learning as much as you can about cryptos.
- Opening an account at a major exchange; it won’t cost you anything to do this.
- Making a small purchase of one or two cryptos and playing with your positions.
- Waiting for a dip (one is ongoing right now) to start buying anything substantial, and make incremental additions.
- Riding your position to at least $100k/coin.
Billionaire venture capitalist Tim Draper raised bitcoin’s profile in a recent podcast, in which he called for BTC at $250K by the beginning of 2023, and ultimately at $5m per coin if it becomes a “currency of choice” and challenges (or even replaces) the dollar. “From the user’s standpoint, it’s open, transparent, local , frictionless, decentralized, and flattens the earth. It’s a hedge against currency inflation and bad governance and a way of connecting the world.”
Anarchist perspective. Free spirits who began the cryptocurrency movement are now working to move cryptos beyond globalist controllers. Decentralized exchanges are in development and coins are adding privacy features. The future of cryptos appears to be this: eventually coin holders will trade among themselves, without using exchanges. Governments, intent upon controlling and taxing participants through cryptocurrency exchanges, will be left holding an empty bag.
If—on the other hand—the crypto candle blows out, we believe we’ll be able to spot its telltale flickers and know when to head for the exits. We’ll be very surprised if a few selected cryptos don’t replace pieces of paper as value around the globe—perhaps even in the good old USA.
Wayne Peterson publishes this blog weekly from time to time at his website.
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