Hurry buy more Satoshis at a higher price😂: Bitcoin slumps to lowest since September, when will the Bitcoin plunge protection team show up to save the day? – January 7, 2020,
In fairness to Bitcoin, all tech stocks are down, because, well, as I like to point out, technology like Bitcoin is DEFLATIONARY and word on the street is that easy money coming from the Federal Reserve will slow down in the coming months and people with lives are trying to get ahead of the inevitable. Bitcoin is derived from Fiat money and most of the money that goes into Bitcoin appears to come from fiscal spending within the United States.
A lot of us are well aware of the correlation between Trump stimulus checks and the massive run in the price of Bitcoin, once Joe Biden became President of the United States. When Joe Biden became president, a lot of people who I assume are very young assumed that the Republican Party would just roll over and die and Joe Biden would spend, spend, spend like a drunken sailor, what most people ignored were government regulations on the U.S economy.
As an investor, I pay close attention to government regulations, even more so than central bank policy, because government regulations can destroy entire industries. These lockdowns and mandates and defund the police movements, that are in Democrat Run cities, equate to more risk on MAINSTREET! What this equates to are shortages, not only of stuff but of labor, fewer people want to work and fewer companies want to hire.
Now, because the labour shortage number continues to shrink because after a period of time according to the U.S government, people who stopped looking for a job aren’t considered in the unemployed numbers, fewer people have the ability as an example to purchase Bitcoin, meaning that more people are probably selling and waiting for a new round of stimulus checks to buy things.
Because paying people money to do nothing equates to inflation, the numbers are starting to reflect a booming economy, instead of economic DEFLATION. Bitcoin correlates with the U.S dollar, Bitcoin has no history without the U.S dollar and it’s for this reason that Bitcoin could be in for an interesting ride in the future.
Paying more money for Satoshis is a lot easier when with Quantitative easing, fiscal spending, it’s more of a challenge when fiat money isn’t as widely available as it once was. Based on my calculations, however, the price of Gold and Silver are about to drop to record low levels. When will this happen? I’m not sure, but at least Bitcoiners can have fun at the expense of Gold and Silver hoarders.
What nobody can predict accurately is the Federal reserves’ response to deflation in economic activity. Because many believe that once the Federal Reserve raises interest rates and prices continue to rise that the Federal Reserve will lower rates again and do another round of quantitative easing, but again, people like myself are hawks when it comes to fiscal policy and government regulations.
The real problem with this economy are all the regulations and the ever-growing government workforce and welfare dependents, this EVENTUALLY has a Gold and Silver bull run written all over it, but depending on how the Federal Reserve responds to deflation, it might have a Bitcoin rally written all over it also.
What will be different between Gold and Silver and Bitcoin is that Bitcoin doesn’t really do anything and if the U.S dollar is imagined to be a liability for the world, this could lead to UNEXPECTED behavior in the marketplace. If the price of Gold and Silver shot up, calls for at least a temporary return to the Gold Standard might become louder and louder, but on the flip side, there could be people calling for a Bitcoin standard.
Where I lean more towards some sort of quasi Gold Standard is that adoption of crypto hasn’t been growing lately. People selling Bitcoin is a clear sign that people prefer physical cash over Bitcoin, because people are still willing to pay a higher price for Satoshis, I can see why some will assume this is good for Bitcoin long term, I argue, people are willing to pay more because Bitcoin has performed well in getting people a bang for their buck in U.S dollars, but if U.S dollars are being debased to rapidly, and Bitcoin returns are stunted by more people having to decide between buying food in Mainstreet and a purchasing bitcoins? Bitcoin Prices could get deflationary very quickly.
Bitcoin in many ways represents malinvestment in the economy, its best asset to date has been that it’s an alternative to the fiat dollar? But because its value is derived from the U.S dollar, one has to ask, what happens if U.S dollars become more scarce in the future, because of the necessity to get more people all over the world back to work?
Fed’s ‘maximum employment’ is here; not everyone has benefited | financialpost.com
Interesting times ahead!