And you know this how?
Bitcoin Price Thread
- Thread starter Magna
- Start date
By simply looking at the crypto price reaction to the recent events in the Middle East.
Simply ... indeed.
No surprise that the instant reaction is to sell risky assets, including BTC. But wars are expensive, and the U.S. Congress shows little fiscal responsibility when it comes to funding various war initiatives, even when the U.S. is not directly involved.
How does the U.S. pay for this foreign aid? Do they draw down a portion of a fiscal surplus? Do they cut somewhere else such that there is no net effect on government expenditures? No, of course not. They borrow. The Fed enables this fiscal irresponsibility by printing money to finance the debt. In doing so, they further debase the USD and further support a primary thesis for why we should expect the price of BTC to eventually continue on its upward trajectory. It's inevitable in the long run.
How does the U.S. pay for this foreign aid? Do they draw down a portion of a fiscal surplus? Do they cut somewhere else such that there is no net effect on government expenditures? No, of course not. They borrow. The Fed enables this fiscal irresponsibility by printing money to finance the debt. In doing so, they further debase the USD and further support a primary thesis for why we should expect the price of BTC to eventually continue on its upward trajectory. It's inevitable in the long run.
Considering how much $ and military hardware are being sent by the entire western world to other nations right now (to continue fighting)... it's ironic for many to still think we're not really fighting a world war right now.
You're wrong
You're looking at the short term price reaction, during a time when most global markets are closed
If you ever traded the markets, you would know the first hour is called the amateur hour
You should be asking why is bitcoin still over $60k? Why has the selling not continued all the way to $40k? When you know the answer, then you will be smarter
Also during which WW that the U.S. was involved in (or even major regional one, other than tail ends of Iraq/Afgh) did cryptos exist?
So sample size is ... zero to base a judgement on.
Absolutely!
There is also a liquidity asymmetry with bitcoin, a crypto asset that trades 24/7/365
Every single bitcoin person/company in the world that owns bitcoin when the crisis (war) started is able to sell all or a part of their holdings. No circuit breakers, no market close ringing the bell
But not every single person/company in the world that wanted to buy when the crisis (war) started is able to buy bitcoin
They have to wait for when the markets are open for their assets so they can raise liquidity, perhaps sell some of the other assets because there is fear, maybe use available cash, or maybe borrow against their available collateral margins
And with that liquidity asymmetry with all the markets closed, why did bitcoin stop going down and even bounced back up?
--------------------
To me, the answer is clear, bitcoin is the safe asset during this time of crisis
I cannot speak for everyone that owns bitcoin, but as someone who put most of our family's net worth and life savings into bitcoin, the thought of selling bitcoins is absolutely 100% not something we considered
-----------------
I wish I can show everyone what is so clear in my mind, that in time of crisis, owning bitcoin is the best choice... perhaps in 5, maybe 10, maybe 20 years, it will be just as clear to everyone else
Bitcoin is money that you can truly own, permissionless, censorship resistant, accessible and usable almost anywhere in the world
If the Jews had access to bitcoins during Nazi Germany, they could have easily crossed the borders at the first sign of trouble, if the Ukranians chose put their wealth into bitcoins, they could have escaped the invading Russians (which some news stories did say happen), and if the residents of Israel and Iran want to escape with their wealth outside of that region, they can do so now by putting it into bitcoin
And I'm in Asia now with my family, we can easily pack up and get on the next flight to another country, should this place become unsafe for us
No fiat-asset prison, like real estate or investments in Blackstone REIT's, or gold bars to put in luggages, or for that matter a Monet
What are the other choices? money in the failing banks, illiquid real estate, stock market dependent on the Fed monetary policy that are also affected by the crisis, illiquid art pieces, illiquid collectibles
John, in all fairness, Bitcoin rebounded because the Iranians declared that their bombing campaign had been "concluded". Had the Iranians continued firing their drones and rockets, I wouldn't be so sure where Bitcoin would be trading.