This week I want to pose a question, and invite you all to respond
As a flesh and blood human, who is prone to make mistakes every now and then, rather than bemoan our mistakes, it is far better to correct them and learn from them.
None of us are top of our game every day or every week, and last week it was my turn to screw up.
Which, as bad as it is, does prove I am a person who shares my ideas and thoughts, rather than copying other people’s analysis and regurgitate the general consensus.
If I wanted to be a smart ass, I would ignore what I had discussed last week and move on to something new. But, being old school, indeed very old school, I will never shy away from what could be a fuck-up.
In hindsight, I possibly should have bought BTC around 38,000, but I got greedy and missed it.
I am not going to cry about missing an opportunity, it’s not like it cost me to lose money. However, I need to delve deeper into the implications how these new ETFs and the vast sums of professional money flooding into these ETFs is going to change the Bitcoin landscape and affect day to day pricing and valuations, as well as what it might mean over the very long term...
If the story is true, and it probably is, that the recent drop in values was caused by Grayscale selling BTC outright, and then once the cash had cleared, pumped that money into an ETF which then had to buy BTC. The whole move, the drop and the subsequent rally has seemingly occurred on a technicality.
And obviously, that are still selling BTC and adding to their ETF position, because the rally you would expect, seems to have a cap on it, for now.
This clearly reveals how the actions of one major player or whale, can move this particular financial instrument anywhere they want, or indeed stop any expected move.
If, as many people believe, these ETFs will be good for the price of Bitcoin, and other cryptocurrencies when more EFTs are launched, then we should simply just get on-board and run with it. But is it that simple?
No one who has BTC in their portfolio is going to complain when the value increases, and we will all cheer from the roof tops if it goes to new highs or, as the young influencers used to say, rockets to the moon. But with many holders willing to simply sit on their stash, HODL, and ETFs buying anything that becomes available, the idea that BTC will become an exchangeable asset with lots of turnover and massive circulation, is hard to justify.
So what use is a currency that doesn’t circulate?
BTC is not like FIAT, there is a finite amount of BTC that will ever come onto the market. Which for many of us makes it a valuable asset to hold. But if everyone continues to hold, and the EFTs keep buying whatever they can, at some point, and at some price, there will be no more BTC in circulation.
And at this point, the question may arise as to what is the point of holding, or investing in, a bunch of digital zeros and crosses?
Don’t misunderstand me, I remain bullish of BTC, and if over the next few years, it reaches the heady heights of 120,000 or 200,000 or even more, it will have achieved great success, financially.
But, if BTC is sitting on the books of too few people and not circulating as widely as was envisaged and hoped, then the long-term future might be less bright than many of us suspect.
This is not a problem we are going to face next month or next year, but at some point, in the future this will be a question people will ask.
I might be wide of the mark with this comment, and I would relish reading replies to this question from people more learned than me.
If a currency’s circulation declines or stops, how do you measure its value? Does it become a commodity for which there is no use, or does it become an antique for HNW collectors.
Sure, on the way to the moon, some HODL’ers will cash out, and we will see some massive corrections on our travels. But at the end of the day a $200,000 BTC could be the riskiest asset anyone ever owned.
And I have not mentioned the long-term future for most shitcoins!
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