BTC at 50K, is the end of the dollar near?

in LeoFinance3 years ago

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They can no longer hide it, the great investment magnates are directing their gaze towards the dollar, still the most powerful currency in the world, however the bets are not aimed at its rescue, rather, the strategy is to sink even more the American currency, taking profits from its aggressive devaluation against the main cryptocurrency: the bitcoin (BTC).

Certainly, in the business world the dollar no longer generates so much confidence as to establish positions based on possible rises in its price in relation to certain values such as BTC, Gold, commodities or food, and even in comparison with other more stable economies such as those of East Asia (China, South Korea and Japan) or India moving their wealth outside the 50 states of the American Union.

First Warren Buffet, an eternal dollar optimist and furious critic of BTC, had no choice but to sell all the shares he had acquired in American airlines in the hope that they would rise in price as the global pandemic subsided, and then move his investments to Japan. Recently Stan Druckenmiller, another of Wall Street's greats who boasts of not having suffered losses since 1981, admitted that he has short positions against U.S. Treasury bonds, once a real folly but today a move that shows that the green currency does not have a good future.

The dollar situation became more critical when Mr. Elon Musk revealed to the world that he sold Tesla shares to buy $1.5B in BTC; since then rumors started around which other companies will join the car company in the race for the most traded of the cryptocurrencies. It definitely does not take a great lip reader to determine that if you buy such an amount of BTC it is because you expect its value to continue rising to the detriment of the American currency.

Many experts assure that the fall in the US economy is a product of the crisis caused by COVID-19, however that country was already giving warning signs months before the first contagion in the territory of the American Union. In 2018 the repos (loans between banks that are granted in exchange for treasury bonds) were already unstoppable, a situation that led the Federal Reserve (FED) to gradually reduce interest rates to the same extent that more money was being printed. Since then the Fed has done nothing but issue more and more money ad infinitum.

Of course, COVID-19 only accelerated the process, on the one hand of the dollar's decline and on the other of BTC's supremacy as the main safe-haven security on the planet. Evidently the big investors always point their bets towards the assets that generate the greatest wealth, at this moment the main one is BTC, the second one is gold and the third one, although it sounds incredible, the short positions against treasury bonds.

Druckenmiller himself justifies his anti-dollar investments by virtue of the inability of the FED to reduce Quantitative Easing (QE) and the stance of the Biden administration in establishing a stimulus plan close to $3000 per capita without responding to a productive plan, simply handing out money to the population is the strategy to face the crisis. Likewise, the US military industry is a voracious dollar-swallowing machine, requiring a large flow of money that only through QE applied relentlessly by the Fed and the White House can cover such a bottomless bureaucratic hole based in the Pentagon.

In the meantime, BTC does not stop its ascent and its attractiveness becomes more and more seductive for the big institutions, which step by step are yielding their positions against cryptocurrencies. It seems that they do not want to admit that they were wrong, maybe they got tired of fighting against this kind of digital gold, what is certain is that as the dollar and fiat money reveal their inability to get out of the economic crisis, there are more reasons to adopt decentralized digital money as a new means of enrichment, or at least to give value to our investments and savings.
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Not by a long shot the international settlement and forex markets aren’t going anywhere anytime soon! We all depend on it, Bitcoins impact regardless of price is far too small to end any sort of dollar hegemony! I get eveyeone wants to be bullish but we’ll see this sentiment day down when the bears come around again

It’s just one step to better distribution of the currency that’s all

I understand that BTC is a very unstable cryptocurrency in its price and it still has a long way to go to establish itself in the international economic system as a substitute for the dollar and the fiduciary model, however the situation of the model that prevails now seems to be crumbling judging by the agreements reached in Davos, where all the leaders of the most developed countries in the world, heads of institutions and bankers are of the idea of reforming the world economic system as soon as possible.

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Yes reform as soon as possible but not with Bitcoin it could be a SDR as the peg, it could be CBDC it could be MMT but trying to peg to gold or Bitcoin is forcing austerity measures on government and I thats the last thing they going to want

Even if they said 1% backing to gold or Bitcoin it would be enough to cause complete market melt downs

It is a fact, BTC at this moment is better valued than US treasury bonds and I am sure that not only individuals or institutions consider BTC as a safe haven asset, also many countries keep it in their treasuries as a reserve currency just like gold or the US dollar itself. The latter will be evident and undeniable as BTC continues to strengthen its value and the old order no longer has a reason to stay alive, the cryptocurrency regime will be difficult to restrict or sanction, they will continue to function with BTC at the forefront of the new era of decentralized digital currencies.

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How is it safer than a T-bill? I am a bit Bitcoin bull but even sounds like a stretch. How is BTC a safe haven asset? It hasn't even hit 1 trillion in market cap lol Bumble just IPO's this week, and its already 8 trillion.

Like I said I am a Bitcoin bull, I own a sizable amount of it, and maybe it gets there one day but I don't like to speculate, it just sets you up to trade emotionally. You need to look at whats happening now, and what you're saying is really not the case

Do I want to be proven wrong? Sure !

I think we are still a little far from that moment. I remain optimistic about BTC and crypto as a whole gaining more importance in the global economy, but the establishment is still very strong.

A great and thorough article, anyways! Thanks for sharing!

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Maybe so, however two things are happening: 1) BTC, despite its price instability, keeps on rising and 2) after the last meeting in Davos it seems evident that the current dominant system cannot withstand one more crisis, that is why they are agreeing on a great reset.

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Bitcoin is flying high!

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Yes, my friend, that's right.

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While I agree in theory that bitcoin could take over the dollar, in reality I just don't see any way the governments (and probably more appropriately, the bankers) are going to allow it to happen. If bitcoin became the base currency then it would force all governments to actually become accountable to the people they governed. Like that's ever going to happen. They couldn't print money. They'd actually have to pay back loans. If they took loans they would have to pay back interest. The silly thing about our current path is why do federal gov'ts even collect taxes at all? The money they take in doesn't even come close to paying for what they've already borrowed. And they keep printing more whenever they feel the need. If they can do that, why bother taxing people? Just print more. It would probably be cheaper anyway....

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Evidently BTC is public enemy number 1, precisely because of the impossibility of governments and any individual to manipulate its issuance. However, our beloved BTC has a weak point: it is basically acquired by buying it with fiat money, obviously, governments, bankers and institutions have the greatest advantages in this matter since they are the ones who print banknotes and who own the most fiat money in the world. A scenario that I think could happen is that by force of printing these entities will gradually take over the power of some BTC, considering that its price is no longer relevant for them because it can be covered by printing more and more, with the risk that this gesture entails in social and economic matters among the peoples of the world. I was struck by your approach, I think, if you allow me, I will make a publication on this of debts, governments and currency issuance. Thank you for commenting and for your support

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Feel free. I'm a little nervous to hear what you find out but I'm sure it will be interesting and informative. The only real thing we have going for us is if big tech continues to enter the space. If we can get enough of the tech world owning and adopting it for the reasons Michael Saylor talks about, then we have a shot of outlasting or at least competing with the politicians. Who do you think elects these people? Bankers and big tech (media, social media, etc...). They are the money and the propaganda behind the politicians. If big tech splits from the bankers, it could get crazy. Unfortunately, that would require principled stands in the face of enormous financial pressure. Probably not going to happen....

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