During the 20-year Internet bubble, about 99% of Internet stocks burst, and only a few companies reached a trillion-dollar market value, which also paved the way for a true bull market. The cryptocurrency market will face the same fate, and Bitcoin is likely to be a small part of it.
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Fragile Fiat-Based Financial System
More recently, the New York Fed has made headlines with its rescue the market gesture, which has injected hundreds of billions of dollars to normalize the situation in an attempt to contain the complications created by the recent spike in repo rates. All of this, just to keep the repo rate below the Feds standard rate.
And it doesnt end there, the Feds move last month to provide surplus cash in the repo market may be the first since the 2008 economic slowdown, but its moving toward the norm.
John Williams, head of the New York Fed (the Feds most important branch), told the New York Times that the central bank may implement a continuous financing for the repo market. What we see is that liquidity volatility is not as easy in this situation, which means that if we want rates to sustain themselves within a narrow range, we have to make sure we have enough reserves to do so, he said.
Bitcoin and its associated supply system are in direct opposition, and moreover, its price exceeds that of gold, as the precious metal can still be found in large quantities around the world, but BTC cannot.
As Jared Dillian pointed out, governments can print money, but not Bitcoin, and anyone can mine it, but not much. Governments cant print gold either, although I imagine we could find more.
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On the Future of Bitcoin
Mr. Dilian provides us with a hypothesis and proposes a simplified scenario to support the price increase of Bitcoin. Considering that only 0.5% of the global population has adopted BTC, and the current available supply is 16-17 million (not including lost bitcoins), as adoption increases, the price will increase accordingly.
But Jared added another point to his argument in favor of rising bitcoin prices, reiterating the dot-com bubble trope where tech stock investors underestimated the promise of the internet and dreamed of going to the moon by owning stocks, As we all know, the rest is history.
He added that the promise of the internet was real, and that it has been delivered over 20 years, developing a real bull market rather than a bubble. Even though 99% of Internet company stocks are gone, a small fraction of the market capitalization is $1 trillion.
He went on to say that a similar situation will befall the cryptocurrency market and that the initial bubble has passed and disappeared. Now is the time to start making meaningful efforts to leverage the underlying technology of Bitcoin, which he believes could be as groundbreaking as the internet.
The original text comes from bitcoinist, compiled by the BluemountainLabs team, the English copyright belongs to the original author, please contact the editor for Chinese reprint.
The original text comes from bitcoinist, compiled by the BluemountainLabs team, the English copyright belongs to the original author, please contact the editor for Chinese reprint.
