Bitcoin has gone through a strong bear market and it looks like the price is bottoming out. While the market was crashing extremely positive things were happening under the hood. Scaling finally happened through Segwit, batching and Lightning Network, adoption increased and big players came in. I think something is brewing and we could soon experience an armsrace between powerful players who all want a part of the Bitcoin pie.
What will happen when rich and powerful entities find out that they can’t control or destroy Bitcoin while they see that it keeps growing?
The result when something is valuable and can’t be destroyed or controlled
When bankers, governments and other elite’s realize that they can’t stop or control Bitcoin they will try to own an as big as possible part of the blockchain in an attempt to maintain the power they currently have. The only way to do so is to mine or buy Bitcoin.
Since the supply of Bitcoins is limited, the price will go up when they buy big amounts. Who comes first will have the best price and be able to buy a bigger share with the money that is allocated to this investment and become more Bitcoin rich eventually. When they realize this a real race could appear to buy the available Bitcoins before one another does.
When an armsrace is born we will see a bull market that is never seen before. The supply dries up because nobody want to sell and the demand skyrockets, but can’t be filled.
Bitcoin works on game theory: Denial will be punished and acceptance will be rewarded
Bitcoin is a global phenomenal and players around the world will eventually act in self interest when they decide how to react to Bitcoin. All the banks can agree that Bitcoin is dangerous for their business model, but when they see they can profit enormously by getting involved early many of them will do so.
Governments will all agree that Bitcoin undermines their ability to control, but when they see they can flourish when they attract the innovation first, there will always be countries to allow it. The nice thing is that the ones to accept it will gain hugely, and the ones to deny it will lose out.
Bitcoin works because of game theory on multiple levels
An example is China. After the crypto ban Chinese citizen are still trading, but the fees are now earned in Hongkong, Singapore, Korea and Japan and Chinese miners are now mining and paying taxes in crypto friendly countries like Canada. All talent and capital moves oversees to enrich other countries and decreased innovation in China is the result.
In the years to come China will be punished by the market because they don't earn anything and all innovation moves away, while their citizen are still trading Bitcoin and using it for capital flights. Meanwhile, the crypto friendly countries will attract new talent, startups and huge amounts of capital. Eventually China will have to surrender and allow crypto’s to not be left behind. Imagine a country that banned the internet twenty years ago, it obviously would be a 3rd world country today.
The first events to trigger an armsrace are already here
In the last year news came out that will make other players realize that they will be left behind when they don’t get involved soon. When this adds up it is inevitable that a tipping point will be reached where nobody has a choice other than getting involved immediately. These events are just the beginning:
Japan could add 0.3% to GDP because of Bitcoin
It is estimated that Japan added about 0.3% to their GDP in 2017 because of Bitcoin. This is not so much yet, but if you imagine that adoption goes exponential and the price could go exponential this year, it easily could be a few percent this year and even more next year. Other countries will see this example and follow suit. Remember that Japan is a big economy, so a small country will have a way easier job to add a few percent to it’s GDP.
http://uk.businessinsider.com/bitcoin-could-be-adding-03-to-japanese-gdp-2017-12
Binance is moving to Malta
Cryptocurrency exchange Binance is moving to Malta because of regulatory pressure. Malta will gain enormously since 8 days of trading volume of Binance is more than the total yearly GDP of Malta. Other small jurisdictions will see this example and some might follow…….
http://www.atimes.com/article/worlds-biggest-crypto-exchange-leaves-asia-malta/
Square market cap surges 15%
Square, a trading app recently introduced cryptocurrencies to their platform. Since then the total market capitalization of this company rose with 15%. Other companies will see this opportunity and follow.
https://btcnewstoday.net/19-billion-squares-market-cap-surges-15-due-to-its-bitcoin-venture/
Bulgaria earns 20% of national dept by HODLing seized Bitcoins
The Bulgarian government seized 500 million in Bitcoins a while ago, and because they HODLed them, they were worth 3,6 billion last December. This is enough to pay of 20% of their national dept. An even bigger deal is the fact that this is an example for the rest of the world that just HODLing Bitcoin in the treasury, could potentially hedge for the entire dept of a nation!
https://www.rt.com/business/412700-bulgaria-shocked-bitcoin-piles/
If you cant beat it, join it…….
In the last year we saw many bankers literally turn 180 decrees on the subject of Bitcoin. This is exactly what I described in this post: They figure out that they can’t destroy, deny or control Bitcoin, so they have to join to remain relevant:
Jamie Dimon
Jamie Dimon is probably the most famous example. After crashing the market by calling Bitcoin a fraud and claiming to fire all his employees trading it, he changed his mind after a few months and started to trade himself.
George Soros
In the beginning of the year he claimed that Bitcoin is not useful as a currency but just a bubble. A few weeks later the announcement came out that his family office will start to trade cryptocurrencies.
Rockefellars
Just after Soros the news came out that the Rockefellars will start to invest in the cryptocurrency industry through their investment firm Venrock.
HODL and wait patiently till the tipping point is reached
Today most people agree that Bitcoin is here to stay and after years of denial it is time for realization that it is the future. More and more legacy players start to figure out that they should get involved to remain relevant in the new world.
I expect a tipping point to be reached sooner than later where all the players will rush to get in first. If this happens we will see a FOMO we have never seen before and it will be impossible to wait to buy the dip. If you want to enjoy the biggest moonshot ever, you should be HODLing now!
WELCOME TO THE REVOLUTION!
Disclaimer
This is no financial advice, just my view on the market.
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