As of Todays Date Bitcoin Is Still Selling For Less than $20,000 USD and With Rampant Consumer Price Inflation, Government Stimulus and Cheap Money Likely Won’t Help – June 19, 2022,
I expected a Bitcoin to bounce back to $20,000, but it hasn’t happened yet and that’s very interesting because the way I see it is that people are running out of fiat U.S dollars and because Bitcoin offers nothing when the price is declining, many are opting to cash out while they still can and the more people cash out, the more of a DEBT Bitcoin becomes because you have to remember there’s a COST involved in maintaining the network, and the costs are HEAVILY dependent on Energy prices.
When you own Gold and Silver or have it them in your possession, the MAINTENENCE costs no longer exist. Sure if you have a lot of Gold and Silver the storage costs will have fees attached to them, but operating costs are non-existing.
With Bitcoin, the network has costs and each private participant has to incur costs in order to maintain the network, which is why a declining Bitcoin price is both good and bad, good in the sense of true believers will have to maintain the network potential at a loss, thereby FINALLY seeking to make the network sustainable at lower costs and bad in the sense, that if Bitcoin hits a record low, it might stay there for the foreseeable future, why? because higher costs equate to more poverty for more people, which is an economic downturn and people spend more money on essentials and less money on risky assets, during economic downturns
Prior to this Bitcoin price decline, a lot of people imagined the price of Bitcoin would rise no matter what. That fantasy is gone now, and sure the lower it crashes the higher your gains could be in the future, but that’s speculative behavior, and gambling in that way, would equate to Bitcoin potentially becoming a PUMP and Dump scheme, which would make it UNINVESTABLE, ESPECIALLY FOR INSTITUTIONAL INVESTORS, for the foreseeable future.
If Bitcoin crashes to $10,000, this would be very, very bad, because, at $10,000, you’d have to imagine a bounce upward only for the price to potentially crash, as costs to maintain the network start becoming more expensive. One of the problems with Bitcoin is its reliance on ENERGY, now, what I thought was silly, were people in Bitcoin who liked the idea of mining Bitcoin with renewable energy, well, if the Left Wingers are going to war with fossil fuels, and Renewable energies still require SUBSIDIES to even be solvent or viable, this puts Bitcoin mining at risk of becoming a political problem.
Some have been arguing for Bitcoins to be mined RESPONSIBLY, well responsible Bitcoin mining is expensive and if this return on investment for miners is no longer profitable, what then? The costs related to Bitcoin have a threshold of profitability, I’m not sure what the breaking point is for Bitcoin, because I haven’t done the research, but almost everyone I know who invested in Bitcoin, used DEBT to purchase it because they imagined the price was going to $100,000USD.
Maybe that’s only my circle, but the thing people aren’t paying attention to with the Federal Reserve battling inflation caused by the Joe Biden’s war on fossil fuels is that the Petro US dollar is actually getting stronger outside of the United States, and the forex markets, refuse to debase the U.S dollar, and being that Bitcoin is an international asset, what you’re witnessing at the moment is the U.S dollar getting stronger next to Bitcoin and the cost to purchase U.S dollars rises.
But that’s not the entire story, the other part of the story is Joe Biden and other Left Wing political leaders declaring an all-out war on fossil fuels, which is bankrupting their tax base. So, even stimulus spending if it comes is likely going to come at a time in which the money is only enough for consumers and some businesses to SERVICE debts and purchase ESSENTIAL items, meaning that a Bitcoin rally will likely be smaller in the future.
This is why for myself I’m watching the Bitcoin price because I’ve argued for years now that the price of Bitcoin appears to coincide with STIMULUS spending. However, the war on the U.S consumer begins with Joe Biden and the U.S Petrol dollar, because the U.S consumer, has the ability to consume the most. I like to point out how much taxes countries like the EU, Canada, and Australia charge their residents.
It’s the high rate of taxation that leads to low consumption rates in most developed nations. The U.S differs and U.S residents tend to gravitate to the low tax jurisdictions, which is why entities with things to sell, prefer selling to U.S customers and prefer hoarding U.S dollars. The Democrat Party for quite some time now has done everything in its power to make the U.S more like Europe. Well, as you can clearly see, the more U.S mirrors Europe the faster the global economy will mirror European economies.
European countries STRUGGLE to achieve economic growth and because of all the regulations, you don’t see too many innovations coming out of Europe. My argument has been that we’re headed for AUSTERITY measures, but I don’t know how long it’s going to take. There are so many people who are 100% reliant on the government to survive and this number will get worse with every passing day as more people RETIRE.
Where does Bitcoin come into this if it’s proving not to be a store of value? I’m not sure, but at some point, the U.S dollar value of Bitcoin is going to have to start rising again and believers of Bitcoin better hope the price doesn’t drop below $10,000, because if it does, I suspect that’s when some people will be forced to say they’ve had enough, furthermore when it rains, it pours and this is when lawsuits and regulations potentially banning cryptocurrencies might start happening, especially if people start flooding the courts with sob stories of feeling like they were cheated or lied to by the people pumping up the price.
Interesting times ahead!