A lot of people are very excited about Tesla's US$1.5 billion BTC purchase and with good reason.
While MicroStrategy's $250M BTC purchase represented corporate America's advanced scout battalion crossing the Bitcoin Rubicon, Tesla's BTC purchase represents a Corps size bridgehead with thousands of companies lining up to cross over into the cryptocosm.
Tesla's announcement that it will accept customer payments in BTC is also important news for BTC usability for major purchases. Many other major US companies will follow Tesla's example.
But the biggest news of all is that this represents a massive and wholesale loss of confidence in the US Dollar by the largest and most influential companies in the United States.
US companies, including crown jewels like Tesla, are declaring to the world that they no longer have confidence in the US Dollar as a store of value. If major US corporates don't trust the US dollar or any other fiat currency, why should anyone else?
6000 US corporates attended Microstrategy's Bitcoin for Corporates Event last week to learn how to covert their corporate treasuries and balance sheets to Bitcoin.
The significance of converting a company's balance sheet to BTC cannot be over-stated. It is not just saying that BTC is a great investment - it is saying the BTC is better as money than USD.
Once the finance and accounting department goes to the trouble of converting the balance sheet and accounts to BTC, henceforth BTC becomes not just an accepted form of payment, but the preferred form of payment.
Once a substantial number of US corporates have converted to BTC it will become the preferred form of business to business (B2B) payment in corporate America and will quickly spread globally (especially as BTC is so much better for cross border transactions than USD and the antiquated SWIFT system).
Payments from retail customers will follow but will probably be the last link in the chain.
The stage is set for a very rapid top down transformation of the US economy onto a Bitcoin standard, with many other cryptocurrencies filling in all the niches from DeFi to micropayments to Web 3.0 (Hive).
Without Trust there is nothing.
Money is a belief system based on trust. Nothing more, nothing less.
Trust takes a long time to build, but once it has been lost by a substantial number of significant players in a system, the entire system rapidly collapses. This has happened many times before in human history, especially to fiat currencies.
In past episodes of fiat currency collapses it was just one country whose currency collapsed while others were using a gold or silver based standard. The affected country was able to painfully rebuild a new national currency based on a sound money standard.
Today, the entire fiat system is poised for collapse because all major central banks have been involved in profligate money printing, which has reached new heights of insanity during the COVID-19 hysteria. 30% of all US dollars were created in the last 9 months at a time when real production and consumption has plummeted and businesses are collapsing.
US corporates know the real score of what is going on in the US and world economy. They know that the US dollar is rapidly losing value and their stock price appreciation is a reflection of Fed money printing rather than expectations of genuine increases in the future profits.
Tesla's announcement today will be viewed by future historians as a key trigger of the transition to a cryptocurrency based financial system.
The Cryptocosm is ready.
The alternative financial system of the cryptocosm is already in place, waiting to accept the multitudes.
DeFi and centralised crypto platforms such as Crypto.com, Gemini, BlockFi, Binance and others already provide all the services that both retail and business customers have traditionally used banks, stock brokers and insurance companies for.
These platforms charge and pay real interest rates (6-14%) representing the time value of money. This incentivises savings and ensures borrowing is for productive projects.
Zero and negative interest rates violate the laws of physics because time only runs forwards, so the time value of money (interest) must always be positive. They are only possible in a failing fiat fantasyland.
There are hundreds of user friendly apps ready to be downloaded by the masses to allow them to move into the cryptocosm as rapidly as their fear of failing fiat currencies motivates them.
Thousands of blockchain based projects have platforms available and working to replace every function of the current Web 2.0 internet with decentralised Web 3.0 versions.
A new world is about to be born.
Please vote for my Hive witness. (KeyChain or HiveSigner)
We are entering into uncharted territory. These blockchain projects will go from "pet projects" into mega-mainstream, capitalized, well-funded, front-page-news ventures that will attract the attention of millions.
We've known this for a long time, that cash is loosing it's status as "king". Even dogecoin is looking better than greenbacks!
Posted via neoxian.city | The City of Neoxian
Is this also a signifier that support for the 200 zombie corporations will be removed and a forced collapse of USD is imminent?
How will the American government successfully release a digital dollar (which requires trust) when so much has already been invested in decentralised alternatives?
They won't be able to put any crypto restrictions through the door because the corporate world, so dependent on crypto for its stability, simply won't allow it.
It will certainly be interesting to see how this plays out. It's a theatre that affects the rest of the world's economies.
You are quite right that this will very significantly constrain the ability of the US government to restrict or ban crypto. It gives US corporations the ability to move offshore much more easily in response to restrictions.
I was going to add this but the post was getting long already.
Honey, poured directly onto my eyeballs. Delicious :)
Well, when you talk of USD and BTC, this makes sense, but BTC in every day use is still a distant dream, isn't it ?
Posted Using LeoFinance Beta
Tesla's billion is nothing compared to the trillions of dollars they are printing in order to devalue the dollar.
Tesla’s BTC buy is motivated by exactly this profligate money printing.
Probably, or just Elon doing a little pump and dump, he does have $28 billion dollars.
Every cent of that $28 billion is allocated for creating a self-sustaining civilisation on Mars.
He is a joker personality but he is very serious about his mission.
I'm not sure what Freud would say about an obsession with sending giant rockets to seed alien planets.
:-) Well he has had 7 kids now from 2 different women I think so he is certainly spreading his seed.