Pro 26

Perfect Storm: Bitcoin Didn’t Exist in the Last Financial Crisis

Bitcoin has been quietly preparing for over a decade for the next market storm as a non-political alternative to the money printing pyramid.


Bitcoin Separates Money and State

Bitcoin was forged by the last great financial crisis of 2008 and designed to thrive in financial turmoil.

“Bitcoin adoption has always been driven by bank failures, bailouts, bail-ins, and political unrest,” said Max Keiser in an interview with Bitcoinist earlier this month.

It’s certainly no coincidence that Satoshi Nakamoto left a message in the first ever mined Bitcoin block —known as the genesis block. It famously contains the dated title of an FT article:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

The anonymous creator hints that Bitcoin is a non-political alternative to the existing financial system. The Bitcoin whitepaper could, in fact, be interpreted by some as a declaration of the separation of money and state. 

Bitcoin was an inevitability  a solution to downfalls of the trust-based monetary system — in which central banks and governments have historically abused that trust at the expense of the public.

For almost fifty years now, the de facto global currency has essentially been running on ‘full faith and credit’ only. The problem is that when this faith is tested by the markets (i.e. reality), credit-fuelled bubbles are exposed. When they go pop, liquidity dries up and cash once again becomes king.

Bitcoin: Trust Buster

So it’s no surprise that cash injections — euphemistically known as QE (Quantative Easing) — have become the preferred drug prescribed by central banks to fuel the longest bull market in history. 

At the same time, the demand for the US dollar hasn’t waned but actually risen. This phenomenon may have impacted the price of bitcoin 00 this year, according to Keiser.

“The problem Bitcoin has had recently is its competitor, the US Dollar, has been rising,” he explains.

When the dollar rolls over and starts dropping, Bitcoin will hit new ATH.

Meanwhile, critics say it’s too volatile to be a safe haven alternative. Its price has admittedly dropped by 85 percent from its all-time high in 2017. But proponents, like Max Keiser and many others, argue that short-term price fluctuations do not matter if the legacy fiat monetary system is inherently flawed.

They also note that savvy investors are realizing the long-term value proposition of holding the world’s most politically-neutral, hard form of money.

Simply put, trusting no one pays off for those who wait.

Bitcoin Transfers Value From the Sodler to the Hodler

Saifedean Ammous, economist and author of the Bitcoin Standard, states that Bitcoin’s attributes, particularly immutability and neutrality, make it attractive to investors with a long-time preference.

saifedean

Saifedean Ammous

He explained:

Bitcoin has already gone through 9 years of growth out in the wilds of the internet, mostly without a central planner in charge of it after its creator disappeared. It grew because it offered utility to enough users and developers to keep maintaining it.

It has weathered attacks and hacks and ‘community conflict’ and plenty of powerful interests and questionable characters trying to bend it to their will. After all of this, Bitcoin can indeed claim to be immutable. Once it became clear Bitcoin was successful at doing this, then anyone who was interested in an immutable digital hard money could use it.”

Coinbase President Asiff Hirji, whose San Francisco-based exchange launched a custodial platform for institutional investors earlier this year, also sees Bitcoin and cryptocurrencies rewarding the patient in the future.

According to Hirji, none of Coinbase’s investors speculated on BTC price when they valued the exchange at $8 billion earlier this year. They weren’t betting on what the price will be “today, tomorrow or even a year from now,” he said 

“If that’s your time horizon, as an institutional investor, you shouldn’t be touching this,” adds Hirji.

Fragile Fiat

From a security standpoint, centralized money systems are also honeypots. Centralized infrastructure is prone to hacks and shut down compared to a much more robust decentralized network like Bitcoin, which has been operating 24/7 with 99.8 percent uptime.

What’s more, third-parties aren’t just security holes. They are also structurally political. A duopoly such as Visa and Mastercard, for example, can (and do) restrict access for their own reasons, and even have the power to push other companies to toe the line.

bakkt earnings season Wall Street's Old Guard Has A Double Standard When It Comes To Bitcoin

The next global financial crisis is baked into the fiat cake. It’s a matter of not if, but when.

Will Bitcoin be ready? Only time will tell. But with warning signs already surfacing such as global social unrest and the markets tanking, the test may come sooner rather than later. 

Do you consider Bitcoin the perfect long-term investment? Share your thoughts below! 


Images courtesy of Bitcoinist archives, Shutterstock

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Pro 07

‘Buffett Bet 2.0’ – Investment Fund Puts $1M on Bitcoin to Outperform S&P 500

Asset manager, Morgan Creek Digital, is offering an interesting wager if anyone is willing to take it. It’s willing to bet $1 million, that its Bitcoin-focused Digital Asset Index Fund outperforms the S&P500 over the next ten years.


Buffett Bet 2.0

The fund tracks ten major cryptocurrencies, such as Bitcoin, Ethereum, and Litecoin, although the bulk (78%) is Bitcoin. Morgan Creek is so sure of their success, that the partners are putting up the stake themselves.

The wager has been dubbed ‘Buffett Bet 2.0’, after a similar bet made by Warren Buffett, that the S&P500 would outperform a selection of hedge funds over a ten year period. Buffett won that bet, collecting his prize just last year.

Morgan Creek partner, Anthony Pompliano, says the plan is to donate the proceeds to charity, win or lose.

Cold Winter

The bet comes at an interesting time, as Bitcoin (BTC) 00 and other cryptocurrencies are enduring a prolonged crypto-winter. However, US stocks have also fallen recently, due to a number of concerns over global outlook.

Pompliano explained that the company was not just being bullish on crypto, but that its competition was also not exactly at an all-time high.

This is a combination of our outlook not only for the upside of cryptocurrencies but also the outlook on public equities.

Bad Form

Morgan Creek had better cling to the mantra of ‘past performance is not indicative of future results,’ however. The last big bet on Bitcoin is just weeks away from losing.

A call option costing $1 million was placed on a bitcoin price of $50,000 at the end of last year. Following a year which saw the price move from $1000 to $20,000, that may have seemed like a safe bet. However, for the contract to be worth anything now, Bitcoin must see an increase of almost the same magnitude in just three weeks.

Let’s hope that Morgan Creek Digital has stocked up on rabbit’s feet, horseshoes, and four-leaved clovers.

Earlier this year, an Australian investor tried to make a $6.3 million bet with Berkshire Hathaway, that Bitcoin would top its share price by 2023. It’s not thought that the famously crypto-skeptic company took him up on the offer.

Who will win the bet? Share your prediction below!


 Images courtesy of Shutterstock

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Lis 13

Stock Market Slump Could See Bitcoin Price ‘Make New All-Time High’

Cryptocurrency inventor, fund partner and advocate Max Keiser is predicting new all-time Bitcoin price highs as the stock market tumbled again this week.


Bitcoin to ‘New All-Time High’ as Stock Market Slumps

A drop in share prices for both Goldman Sachs and Apple has equated to an approximately 160-point loss for the Dow Jones November 12, leading Keiser to suggest the index could collapse to below the significant 10,000 barrier in future.

“10 (years) of cash transfusions from central banks – masking the globe’s economic death in 2008 – hasn’t worked,” he wrote on Twitter.

“Dow 10,000 here we come. (Bitcoin) will make new (all-time high).”

The Dow last saw 10,000 during the banking crisis a decade ago, having hovered around 25,000 for most of 2018.

Anticipation Of Crypto Awakening Grows

While Keiser like many other well-known commentators has long heralded a return to form for Bitcoin price 00, cryptocurrency markets have yet to signal their bear market is over this year.

As Bitcoinist has frequently reported in recent months, the anticipation of institutional investor money buoying sideways prices continues to run high. Major crypto assets themselves, however, continue to trend slowly downwards.

Big money remains faithful to the optimistic narrative on Bitcoin, however. Last week, billionaire investor Tim Draper took to the stage at Europe’s largest fintech conference Summit 2018 to double down on his prediction the largest cryptocurrency would hit $250,000 per unit by 2023 at the latest.

He was joined by Blockchain wallet CEO Peter Smith and Managing Capital co-founder Garry Tan. While both stopped short of endorsing the quarter-million figure, there appeared to be unanimous agreement that Bitcoin would be worth more in USD terms by this time next year.

“…My prediction for $250,000 by 2022 – maybe 2023 but in that range – is absolutely solid, but I’m not so sure how we’re going to get there,” Draper said.

What do you think about Max Keiser and Tim Draper’s predictions? Let us know in the comments below!


Images courtesy of Shutterstock

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Úno 09

Bitcoin Welcomes Investors Affected By Japanese Stock Market Volatility

Source: bitcoin

Bitcoinist_Bitcoin

Being part of the stock market is not as fun right now as it was a few years ago.  Every day, a new financial disaster seems to be waiting just around the corner. After the trouble started brewing in China a few months ago, the Japanese stock market is the next one to plunge. The reason for this is simple: government bonds are going negative for the first time. At the same time, Bitcoin is looking more and more appealing as a way to diversify portfolios.

Also read: Valve is Bringing Bitcoin to Over 125 Million Steam Users Worldwide

Japanese Stock Market Takes A Big Hit

In this day and age, being involved in the financial sector with one’s money doesn’t make for a great experience. Every type of investment that seemed reasonably safe – for as far as that is ever possible is losing value faster than one can say “abracadabra”. No stock market appears to be safe from major plunges, and the Japanese market is no exception.

Earlier today, the Nikkei dropped a whopping 5.4%, which is just a sign of what is to come on the Japanese stock market by the look of things. To make matters even worse, Japanese government bonds went negative for the first time, as investors started pulling out their reserves and putting them into other assets.

As a result of this move, anyone who bought Japanese government bonds will be taking a financial loss by simply holding this asset right now. Until the yield of those bonds is back in the positive – or, at least, break-even – the Japanese stock market will remain very volatile. However, this is a trend taking place all over the world, and the ripple effect seems to be in full effect.

Truth be told, this loss on the Japanese stock market does not come as a big surprise. Both the US and European markets had taken several hits yesterday as well, and it only makes sense to see other markets follow that trend. The biggest “losers” in the market were Mitsubishi UFJ Financial Group and Nomura Holdings, both of whom lost close to 9%.

Mitsubishi UFJ Financial Group Announced Digital Currency Plans

It is especially interesting to see the Mitsubishi UFJ Financial Group on that list, as this Japanese bank recently announced how they are looking into developing their digital currency. Whether or not this announcement has anything to do with the sharp drop remains unknown at this point, though.

Bitcoin remains one of the only safe bets remaining for investors. Granted, this popular digital currency can be quite volatile at times as well. But at the same time, Bitcoin is nearly the only asset with a potential for a value increase, whereas more traditional solutions are not even able to offer a return of investment these days.

What are your thought son the Japanese stock market right now? Let us know in the comments below!

Source: CNN Money

Images courtesy of Shutterstock, Mitsubishi UFJ Finance Group

The post Bitcoin Welcomes Investors Affected By Japanese Stock Market Volatility appeared first on Bitcoinist.net.

Bitcoin Welcomes Investors Affected By Japanese Stock Market Volatility

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