“Above All ~ by Karezoid Michal Karcz”
Few years ago I encountered this jewel of past projections about the value of Bitcoin and almost an year ago I sung it in my first essay here. Beautiful, ah!? Almost as beautful as the term 'retrojection' itself. But, it is way past Nov 2018 already ...
... and where the bloody hell our $100k BTC is !!??
BTC was almost $20k this time last year. Meanwhile cryptocurrency adoption nearly doubled. Metcalfe taught us that this growth should've corresponded more to BTC price figure closer to 4 times $20k than to ... near $4k. But it has not. What is going on? What happened?
I think I have come up with some nonideological explanations and herewith I share them with you. Nothing complete and exhaustive but few observations, pieces of the puzzle, bits-n-pieces. I throw them in brief here with intention to revisit them later in more detail:
First, the orbit-like motion of the BTC price gives us good intuition over the forces which deviate it up and down from the otherwise smooth unobstructed trajectory of the neat Blue Line:
The Blue Line depicts a spaceship under constant acceleration across empty and flat space. Obviously the fuel is increasing the demand and we'll not run out of it even in case of ubiquitous adoption. The supply is constant, asymptotically capped. And obviously it is NOT an empty and flat space. It is not a perfect vacuum out there.
BTC is flying through turbulent space saturated with strong and dangerous fiat forces.
Since launch the BTC spaceship encountered three huge dark planets gravity wells which vastly affected the course of its trajectory. They are: MtGox, Tether and CBOE / CME Futures.
Mt.Gox was back then the ONLY crypto-fiat interface. To catalyze boom-n-bust event by monopolistic fractional-reserve practices was simply inevitable. Nobody and nothing can withstand such a level of temptation. If power corrupts, we know, the absolute power corrupts absolutely. This explains the 2013 ATH and the 2014-2015 fallback. (Note that direct drive between crypto and fiat, although the many cryptocurrency exchanges now, does not exist cause it is subject of the good will of the banks and entirely on their discretion whether to ''play'' or not with the exchanges.)
Tether - is means to infuse dollars into the cryptocurrency ecosystem without actually to touch dollars. Here is the place to mention three things: no.1 - Tether appears in FinCEN list of regulated MSBs. The fact that it survives for so many years into the harshest of all US regulatory environment, is quite illustrious about the solidity of its legality status ; no.2 - lotsa bullshit we've heard also about how BTC has no use case and is good only for buying illegal stuff, when somehow bizarrely omitted stays the most obvious thing - how good is BTC in buying dollars!; and no.3 - go to the CMC page of USDT and follow with 'unaided eye' the tight interdependence between the USDT marcap and the USD/BTC exchange rate. The more dollars tethered the higher the price of bitcoin. And vice versa. This explains the 2017 ATH.
Bitcoin Futures get settled only in dollars (For now. Bakkt seems to come to change that. Lets see what will happen). They comprise means to short bitcoin without actually to touch bitcoin. The lack of BTC settlement means that only betting against the BTC is stimulated. This, together with the dry out of dollar tetherization, explains the 2018 winter.
So, what conclusions enables us to draw this astronavigational metaphor of BTC price dynamics?
Bitcoin is transactor. Money is transactor. Bitcoin is money. In another essay of mine I started revealing the Cost of Trust issue, and how vastly better than fiat is crypto on purely objective, measurable basis - a set of topics which deserves a lot of further research and which I intend to revisit more than once in near future. Money - all and each of them - is ''backed'' - all and only - by what money can buy.
Money transact value, but also money transact other money. Visualize all Ms of fiat money supply in the world stabled.
The beast grows and soon it won't be possible to be contained any longer within a cage made just of fiat - its food.
Crypto will never displace fiat but will burst out at large and will eat it all. Will Borg it.
I so strongly suspect that crypto will devour ALL FIAT that I currently devote efforts into a project of actual implementation of this.
18qSKUUTAGw1uL53simrSiZ6pJpfxKACvj for research support. Thanks.
Copyright © 2018 Georgi Karov. All rights reserved.