Bitcoin Nose Dives, Is This Temporary, or Is Consumer Price Inflation in Fiat Dollars Hurting Bitcoin Hoarders? Shortages, Stimulus, Consumer Price inflation, and Economic DEFLATION – June 11, 2022,
Bitcoin trades 24/7/365 and I love it because it gives you a pulse of what’s going on in the real world. I think Bitcoin is indeed a glimpse into the future, but I’d be lying to you if I said I think Bitcoin is the future. The government regulates trading, this is how silly the stock markets are. Why are there days off in the markets?
The economy doesn’t stop on the weekends? Anyway, Bitcoin as I’m writing this is at around $27500USD it looks like someone or some people sold a lot of Bitcoin. The timing in which this selling is happening is very interesting because on the weekend people are usually restructuring their finances. This could be nothing or it could be a major sell-off.
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Personally where I’d like to buy Bitcoin is $500-800, there isn’t much upside for it at this point. I don’t understand why people want it regulated, Bitcoin is inefficient right now. It’s not a good hedge against inflation, it could only be stored digitally, the network is entirely dependent on fiat price inflation and a large chunk of the newer investors want the government to be involved in its development? Does that sound like a recipe for success for a decentralized cryptocurrency to you?
Consumer price inflation is DEFLATIONARY. If you’re unaware fiat money is used to HIDE deflation in the marketplace. Under a Gold Standard, the government is at the mercy of the markets, a fiat monetary system gives the government the ability to ARTIFICIALLY prop up the market. Fiat money unlike real money revolves around CONFIDENCE and this fiat money confidence game revolves around IOU resources.
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As long as the U.S dollar continues to buy stuff, the fiat U.S dollar stays afloat, now why I don’t like Bitcoin in the long term, especially with these pushes for regulations is that Bitcoin is a derivative of the FIAT U.S dollar. How do you value Bitcoin without U.S dollars? If armageddon is here, I’m not selling my Gold for Bitcoin? The grid might go down and people may even stop accepting money if things get really bad, because in the end it’s not about money it’s about what money can buy.
If confidence in the U.S dollar disappears, confidence in Bitcoin will evaporate. The cost of energy is rising and this makes mining Bitcoin more expensive. If I’m, to be honest, I’m surprised Bitcoin has held up this long. With that said, it wouldn’t surprise me if Bitcoin held up longer. This could be a minor dip. I Based on the charts, Bitcoin appears to be heavily reliant on government stimulus, which is a good bet if you ask me.
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But it doesn’t make Bitcoin a replacement for the dollar, it makes it a derivative of the dollar that offers value when government stimulus becomes inevitable. Here’s my problem with government stimulus, is that more money is purchasing fewer goods and services, and the longer it takes for government stimulus to be sent out, the more CONSUMER price inflation is going to put consumers in more debt.
Sure some people are desperate when they’re in debt and will buy bitcoin, but other people when they get stimulus checks may decide to spend the money on essentials. Stimulus checks will likely be sent out when things get really, really bad. Although I blame Joe Bidens’ stupid regulations on the economy, namely his regulations of fossil fuels for consumer price inflation, a lot of people are blaming the government spending for inflation.
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Regardless if Biden does another spending package, inflation will likely run hotter than it’s running right now, which would signal the end of the Biden Presidency. I think some Biden hoarders are seeing the writing on the wall that consumer price inflation is HERE TO STAY! and if it’s here to stay, it means a lot of people are about to get poorer for at least the next 2 years.
Bitcoin because it doesn’t pay a dividend is what I consider a good bet if I’m flush with cash with nothing to lose, but it’s a bad bet if I got bills to pay and I’m uncertain if the USD price of Bitcoin is going up.
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Interesting times ahead!
