$300 Billion Bitcoin And Crypto Sell-Off, As Institutionalized Investors Present New Challenges – April 23, 2021,

Coinbase presents a whole new world of challenges for Bitcoin and being that we’re heading towards the end of the month, and a lot of new positions in Bitcoin borrowed to purchase Bitcoin, the smart money has taken its profits and exited leaving the non-sophisticated investors to deal with all the risk.

Now that the institutional investors have taken a more serious look at Bitcoin and how easy it is to manipulate the price, one can expect to see these types of price fluctuations, now and into the future for Bitcoin. Because Bitcoin is a digital commodity it’s a lot easier to manipulate the price and Bitcoin has another problem being that the higher the price gets, relative to the US dollar and other government centralized currencies, the higher the stakes for people who will play the pump and dump game.

I think this going to be new normal for digital currencies and as I’ve written about in prior posts, the other problem facing Bitcoin are taxes, because if I were a regulator, not only would I hit traders of Bitcoin with capital gains tax, I’d also complicate the taxes for merchants and entities like Tesla who sell or accept Bitcoin.

So, it does appear to be that Bitcoin will have to be something likened to a piece of, in which it’s probably better that you sell only when you’re going to make a large enough sum of money that justifies the potential tax burden.

The issue with Bitcoin for me has always been, that it’s not a physical coin, it’s a digital asset on a platform that’s reliant on mass adoption to be of any long-term value. Typically technology evolves and it’s hard for me to imagine that one technology will be dominant until 2130. The blockchain has been around for quite some time, and there have already been improvements to it, meaning that Bitcoin is already turning into a dinosaur and it’s mainly the belief that there is a sustainable value that’s holding it together.

Blackberry isn’t talked about much anymore, nor is blackberry messenger, death by a thousand cuts, made what used to be the dominant private messaging software a non-factor in the very competitive technological sector. In the end what I believe is that this could just be the new normal for Bitcoin, up one day and down the next, possibly there will be long periods of a bull market and then bear market.

This just might be how things are, but if this is the new normal for Bitcoin, people may have to start factoring in a 20% price drop periodically as the new normal until proven otherwise. In Canada, we have a mortgage stress test, which is basically the bank checking to see if the mortgagee will be able to pay their mortgage if interest rates rise if Bitcoin breaks to let’s say $80,000 in the future the buyer will have to know that there is a chance that the new Bitcoin high might drop 20% unexpectantly.

Lastly and again I have to add that the higher the price of Bitcoin, the more ways the regulators will find a way to tax it. As I’m writing this the price of Bitcoin is back down around $50K. Nothing to panic about, but if this is a new bottom it’s still worthy of heavy taxation!

Interesting times ahead!