Why Americans haven't been convinced on cryptocurrency

[newwurldmn]

we weren’t printing money until 2020. Before that, money was created via the buying of bonds. Eventually that money had to be paid back to the bond holder (the fed). This is like the behavior of a proper commercial bank.

Then in 2020 we gave everyone thousands of dollars of stimulus. That was actually printing money (though not enough coins apparently)

To be honest, I almost do feel bad for the FED. I don't think they are stupid and are fully aware of what they are doing. But they have to think many steps ahead, and are at the mercy of what stupid congress expects. The issue is that they aren't nearly as independent as should be the case. They want to fight inflation, but then congress keeps spending money.

The inflation thing is interesting because inflation really hadn't shown up until finally this year, so ever since 2008, they were getting away with money printing. And I also learned that deflation is a much bigger fear which is just as hard to control. Much of this inflation right now is a supply issue, and how do you expect the FED to fix that? Their tools are extremely limited. What was needed was to bring manufacturing back years ago so that we weren't all so dependent on globalization. Lets not forget that inflation really only started hitting hard in the spring, right around the Ukraine invasion. And of course now, they really are between a rock and hard place.

The economy would work much better without the FED, but if that's the system we have, they have to do whatever they can. So when you give them a stupid mandate that is limited, and you give them tons of outside pressure to get a job done in a certain way vs. what they know they should do if there was no outside interference, its no wonder that its all messed up.

 

[johnarb]

we weren’t printing money until 2020. Before that, money was created via the buying of bonds. Eventually that money had to be paid back to the bond holder (the fed). This is like the behavior of a proper commercial bank.

Then in 2020 we gave everyone thousands of dollars of stimulus. That was actually printing money (though not enough coins apparently)

The Fed was printing money by expanding their balance sheet but it was base money creation. It benefited the banks, which in turn benefited a certain segment of the population as investments and assets increased in price

QE on steroids since 2008

But the increase in the net worth of the wealthy did not necessarily increase the prices of regular goods and services. Probably benefited LVMH and the likes, made Bernard Arnault the richest person "officially" in the world. Unofficially, there's some underground people or families worth a lot more

The 2020 money printing was broad money creation. This does cause the prices of regular goods and services to increase since regular people will consume more as they have more money. Paycheck to paycheck life

 

[NoahA]

But the increase in the net worth of the wealthy did not necessarily increase the prices of regular goods and services. Probably benefited LVMH and the likes, made Bernard Arnault the richest person "officially" in the world. Unofficially, there's some underground people or families worth a lot more

I have a different view. Even if the ones on the bottom didn't suffer through prices of regular goods, the fact is that they did suffer because those at the top got so much richer. It's the spread that is key. Even if u don't get poorer year after year, and excluding inflation even, when the top gets richer and you get left behind, you are poorer.

These days you have nurses complaining about their wages making 100-150k, which should be a huge sum, but of course if many in tech make 500k, and the CEO crowd makes $5 million and up, then I guess 100k is considered poor.

The spread between the average worker and CEO used to be about 4x, and now more than likely 50x and higher. So for me, the issue isn't really just that now cash went directly to people in 2020 causing inflation, but more so the huge increase in spread over the past 20 years. Rich people need poor people more than the other way around.

 

[johnarb]

I have a different view. Even if the ones on the bottom didn't suffer through prices of regular goods, the fact is that they did suffer because those at the top got so much richer. It's the spread that is key. Even if u don't get poorer year after year, and excluding inflation even, when the top gets richer and you get left behind, you are poorer.

I agree with you, an example I can think of is real estate prices keep going up making it more difficult for potential home buyers

 

[NoahA]

I agree with you, an example I can think of is real estate prices keep going up making it more difficult for potential home buyers

This is also why I think long term, there is no way to bring about stability. You can't have the bottom person, like a housekeeper, make only 25k, while other professionals make 150-200k. The world cannot function with this huge spread when we are all competing for food and shelter.

 

[johnarb]

Rich people need poor people more than the other way around.

https://twitter.com/x/status/1528006848183508993

https://twitter.com/x/status/1349790663576059909

 

[johnarb]

This is also why I think long term, there is no way to bring about stability. You can't have the bottom person, like a housekeeper, make only 25k, while other professionals make 150-200k. The world cannot function with this huge spread when we are all competing for food and shelter.

We're probably in the middle of a great reset

Lots of systemic failures happening in the world Sri Lanka, Iraq, Peru, Bangladesh, Lebanon, Indonesia, Chinese banks, soon UK, Germany

US $ strength and it being the global reserve currency, plus high inflation is wreaking havoc in the world

On the 34 minute mark of the video, Lyn Alden mentioned the Blackrock paper that I've seen mentioned on FinTwit a few times that we seem to be following as a playbook. I guess the quiet part was said aloud

The rich and powerful have to look out for their best interests. They don't want the game to end. And us regular people can't change the game, so we just have to make the best of what we've got

I shared a video about Blackrock CEO talking about so much interest in Bitcoin from their hnw clients. JPM and GS and MS all have started pathways for their hnw clients to invest in Bitcoin

These hnw people are not dumb. They understand risks of collapse in the global fiat ponzi shceme. They've seen a glimpse of it in 2008

Who knows with this experimentation of alternative currencies with BRICS, there might be a change in the global reserve currency. Or an additional one

The hnw people are diversified in many assets and investments across the world. Now they see Bitcoin as an asset that no government can control or print more of, it would make sense to get some for themselves as part of their diversified portfolio

I'm sure they have gold, too, but the problem with physical gold is it's very difficult to verify and store, securely.... and paper gold is manipulated by JPM and the cabal

 

[NoahA]

We're probably in the middle of a great reset

Those are some very relevant tweets. I'm amazed you found them so quickly since they aren't that recent.

We are completely on the same page. I would love to think that we are in the middle of the reset, and honestly, I'm excited. But I also fear that perhaps it won't happen as soon as I think, yet again. I'm known as the doomsday guy because nobody believes most of what I say. Sure, people see the problems, but since the can has been kicked a little further every time, year after year, calling for doom and gloom is something most don't believe anymore.

The interesting part is that given where we are in the information age, this really could be the first time in history where the people gain so much more power. Its scary on the one hand because most people will gladly give up their freedom for some silly convenience (ie. using these spying devices like Google Alexa, or being tracked everywhere they go via the location on their cell phone, and of course giving into stupid mask mandate and vaccine passports), and the governments are really good about convincing us that we need to give them all the power so they can protect us. But the governments are such a mess right now that they can't seem to get their act together so it would be insane for most people to not see this.

Specifically with regards to bitcoin, I just don't understand how the price isn't even higher. There are more millionaires than even the 21 million bitcoin max suppy. And of course millions are already lost forever, millions more locked up, only 2 million left to mine, and hence most millionaires will not even ever have a whole one. Then we have people like you who have 20 or so from what I recall, and there are tons of people like this who somehow beat most to the game. I mean imagine if every person who owns a house today that is worth more than a million bucks decides to hedge their real estate investment with just 0.1 BTC. This means they just need to spend $2,000 for that 0.1 BTC, a super easy task. Each major city probably has 100k houses in this category, so there would be 10k BTC gone right there. Multiply by 100 major cities in just the US, and easily a million BTC is scooped up. Where would that supply even come from??

The explanation that BTC isn't big enough of a market cap for the rich folk to dabble in is ludicrous. Like do they want to wait until bitcoin is 200k and a 4T market cap before they buy? Or do they want to see a 10T market cap and a 500k bitcoin before they jump in? Granted, there is a chance it all falls apart, we can't deny it. But a 2k risk on something so important is a no brainer. That's about the same price as house insurance for a year I reckon.

The other thing I wonder is how much of bitcoin on exchanges is actually represented by bitcoin in the exchanges wallets? Clearly the exchange doesn't add 0.1 bitcoin to their holdings when a customer buys 0.1 bitcoin. But how much extra supply do they have on hand? If just 10 bitcoins are taken off the exchange, do they have to buy more themselves to replenish their stock? I see people tweet all the time about setting up a special day where we all go into cold storage to see what happens, and Caitlin Long talks about this all the time. But is it possible that there is already a critical supply issue that we don't know about? If we see a sharp move up out of this range lets say, will all those people waiting for 10k fold and chase price higher if it goes above 25k? Do we need a macro shock to force people into buying at any price?

We see what can happen in a short squeeze when traders all get together like they did for GME or AMC. And that was a market that had lots of manipulation both via a larger short position than shares outstanding (125% short float for GME), but also the restricted buying of stock to force it even higher by some exchanges like Robinhood (they allowed only buying 1 share per day at one point). So what would happen if 1k of bitcoin starts getting bought up every day and going into cold storage, and there is no mechanism for manipulation or restrictions. Then its 2k, and 4k, and 10k in the following weeks. What happens when traders who are trading the futures markets don't even want the damn contract anymore that is fiat settled and decide to cash out and use that money to buy the actual bitcoin that they can self custody? It would be the mother of all rallies! Am I dreaming?

 

[johnarb]

Those are some very relevant tweets. I'm amazed you found them so quickly since they aren't that recent.

They got retweeted recently and I just search them again because I remember the main ideas behind them

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On your other points re: short term price of Bitcoin, I am very much with you and it can be frustrating

Caitlin Long is brilliant and explains clearly a lot of reasons for why the Bitcoin price is being suppressed

I think her explanation about meeting investment demand via proxies or alternatives is excellent

For example, publicly listed Bitcoin miners, or Bitcoin futures etf's, or GBTC or CME futures or Coinbase stock. An "investor" whether retail or institutional can invest in any of those and that will be their portfolio investment allocation to "Bitcoin"

The demand for "real" Bitcoin crypto asset has been met and the price has been suppressed. It did not remove spot BTC's from circulating supplies that cannot be sold

Fractional reserve Bitcoin "banking" by centralized entities like exchanges is difficult to prove but it could still get resolved if we ever get a strong enough demand and withdrawal type of news like a Sovereign wealth fund publicly announcing they have invested into Bitcoin

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Vaccine and mask mandates and lockdowns... that's a whole can of worms. Those are control mechanisms. In China, it's playing out... people who lost their savings in banking failures are getting their health app on alert so they are unable to go out and protest

It's important to be aware of what's going on around us. I don't live in Canada so our situation is different but we also have our own set of problems

https://twitter.com/x/status/1562181247681667074

https://twitter.com/x/status/1562836976650240002

 

[johnarb]

Specifically with regards to bitcoin, I just don't understand how the price isn't even higher. There are more millionaires than even the 21 million bitcoin max suppy. And of course millions are already lost forever, millions more locked up, only 2 million left to mine, and hence most millionaires will not even ever have a whole one. Then we have people like you who have 20 or so from what I recall

It would be the mother of all rallies! Am I dreaming?

I have 18 btc currently, usually more btc (equivalence crypto portfolio) during a bull market and much less during a bear market

You're not alone with your emotions and the experience we're going through. As far as I know, most Bitcoiners go through the same mental process when they first "get it"

When I first got into Bitcoin in 2013 at $100, I said F*CCCCKKKKKKKKK!! This thing is going to $10K/btc which was the moon price target at the time from Reddit threads

My own Swiss bank account inside a 16GB USB flash drive. WTF!! Everyone in the world will want this!!

I told everyone, families, friends, every f*cking chance I got. Conversation had nothing to do with the topic, and I'd casually or even abruptly insert it into the subject. Parties, gatherings, daily lunch with friends at work, special dinners with families, whatever it was,

Bull market in late 2013 gave me more confidence to continue this. I was right!! Bitcoin to $10,000! I was applying for credit cards so I can consolidate some credit cards and use them for purchasing more bitcoins

Then 2014 bear market hit, 3 years of pain. Lost all profits. I did not have much confidence to bring up Bitcoin as much anymore, but I still did, even painful as it was

You gotta understand.... Years of bear market is not easy. Nothing you can do can make the time go faster. I was mining shitcoins, I was working a lot more OT at my job

but every time I look at the value of my Bitcoin investment and seeing how I lost 10s of thousands $ of profits and how I could have had a lower cost basis in 2015 or 2016 than the btc's I bought 2nd half of 2013 that just hurts very badly

Was btc ever going back to its all time high of $1,200??

Then 2017 bull market happened. What an insane ride. Then bear market happened again in 2018. but this time, I was mentally prepared. I lost more in % terms and much more in $ terms, but I knew to the core that it was coming back up and going higher than $20K

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I hope some of my ramblings above make sense to you. I just want to let you know I understand how it is going through a bear market

This is my 3rd bear market. It's not easy. My first bear market was more painful than the 2nd one, and this 3rd bear market is less painful than the previous one, fwiw

It gets better. We just need more adoption. We're still nowhere near full adoption, 300M Bitcoin owners in the world compared to 3 Billion Facebook users

Bitcoin is 1000 times more important than Facebook. Monetary network versus Social Media network