Is Bitcoin Actually The Financial Systems Release Valve
Hey Jessatoshis
The financial system has never been under so much pressure before, with so many countries and cities needing aid due to the lockdown measures. Things have surely changed as we move into a new phase of economic recovery or rather a stimulus. Governments are desperate to get this corpse that was mortally wounded in 1971 and killed in 2008.
Each time a piece of the financial plumbing implodes, be it the real estate market, bond market, repo market or stock market, governments around the world move towards quantities easing! Since many of the words currencies, despite the abuse, seem well off hyperinflation territory, governments feel they can continue this course of action to drive growth.
This printing and rolling over debt have seen bond markets absorb most of that newly created capital and created a 40-year bull market in US bonds.
As bonds became a crowded trade, Eventually, that capital slosh found its way to real estate and, of course, equity, both private and public and additionally commodities.
When peak insanity?
As capital becomes cheaper and money is created freely, it looks for a home! Every investment opportunity as an equilibrium it cannot cross, or so I’ve been lead to believe. Eventually, a home can only reach so much in value before it runs out of buyers who can meet that value and prices come down.
Eventually, stocks reach a PE ratio where value investors would never touch it, and once speculators and short-sellers leave the market, the floor is anyone’s guess.
Eventually, bonds reach a coupon rate of 0% and then what is the point of holding an asset with zero yields.
You can paper over this with things like yield curve control and flooding markets with cash through special purpose vehicles, but I think every asset has a limit bar one.
Bitcoin is a black hole for cash
It’s no secret that assets are overvalued, or rather fiat is being devalued, and more wage earners cannot accumulate enough cash to become an asset holder. The fact that you can now trade slices of stocks speaks volumes.
One asset of Bitcoin that many don’t consider is its near-infinite divisibility. Currently, 1 Bitcoin can be split up into 100 million Satoshis, and with the lightning network, it can be done on a sub satoshi level while the main chain could accommodate smaller units with a hard fork.
As the world's capital needs a home and there’s already so much of what I think is overvalued assets in traditional markets, Bitcoin becomes a black hole that can suck up as much capital as it can come into contact with as GDP and purchasing power is divided up with more money printing.
Bitcoin can provide the release valve and a place for capital reallocation while allowing other assets to reprice back to a fair value based on the fundamentals of that asset.
Number go up
Bitcoins NGU number go up technology is more than just a bubble or millennial speculation! Yes, it is that too in the short term. Still, in the long term, I see a new numerator and measuring stick to properly allocate capital based on the returns it can bring rather than trying to do all this guesswork based on suppressed interest rates and following where inflation finds a home.
Despite what we may think, there is so much underlying scaring and inefficiencies due to our fiscal and monetary policy. It needs a natural force to correct it, which I think is Bitcoin.
Have your say
What do you good people of HIVE think?
So have at it, my Jessies! If you don't have something to comment, "I am a Jessie."
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When peak insanity?
We reached that about 109 years ago - it just takes some people , some time to catch on.
It's crazy how PE ratios are calculated now. Instead of 1-2 years out, they are claiming about 5-10 years out. Also bond rates can go negative. This means you lose money for holding bonds thus the only ones who truly want it is the federal reserve as they are the buyer of last resort.
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Look if there were good companies with solid balance sheets trading at around a PE of 6 id be jumping in even with inflation to capture that dividends and then moving that into Bitcoin, but it's just not the case, the cost to capital is too damn high.
You could already be losing money on your dividend or your bond coupons because by the time those pay out each year you've lost purchasing power via the billions printed every month.
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Good point about Bitcoin being both a speculation bubble and a future financial masterpiece. Really interesting that something could be both
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I think it can be both, it all depends on the time frame, like now yes this year Bitcoin will be bubblicious and overbought but that's the free market forces at play, it will correct eventually. We who have seen a cycle play out know this, but I think if we track the straight line and eliminate the noise the direction is towards a financial measurement tool that helps us price all our goods and services
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I think more like a financial life boat for those getting the feeling that their dollars are being wasted away in buying power each day at the same time the governments and multinationals are devising more tricks to steal what's left. "You own nothing and be happy about it."
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Lol looks like someones been checking out the world economic forums great reset bullshit, well yall can own all the fiat you want that's fine with me, I'll own Bitcoin and convert any fiat I can into Bitcoin.
Perhaps that's from a retail standpoint yes, but Bitcoin is also becoming a corporate play too, but for those who have cash to convert, if you're running on fumes/loans/debt you can't exactly stack sats
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It seems that way, but there's still the uncertainty always. I don't think "they" will/can shut down bitcoin, but there could be a black swan of some kind. But I do like Saylor's analysis that once there is a 'protocol', a dominant system like Bitcoin (Saylor thinks in history of technology terms, like once the railroad track dimensions were created and implementation spread, it has a huge implied inertia/resistance to modification), the same protocol continues.
If they do take it down we fork it and move on, people will just switch to the new protocol with all our balances in check, this cat is out of the bag. I can only see countries banning themselves from Bitcoin not banning Bitcoin from their country and once they see the economic pain of doing so as BTC continues to grow, its a no-brainer
Yes states can act in non-economic ways and that's horrible for citizens but that becomes a human rights. The more I stack BTC, the less tied I feel to my country, I'll go anywhere where me and my BTC are valued.
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yes, we need to get over this sickness about borders, until then no one will be truly free. it's our system of colonialism that we're still in ... everyone wants to come to the U.S. from central america and mexico because we've made sure always that those countries are f&cked and our colonies/tributes. but people don't want to think or give up on racist premises. until we allow sovereignty and demos integrity for all, we'll remain in this psychosis
I think Borders are both to keep some in and others out and are enforced by resources, resources are made up of currency, they use currency as the real border the physical ones and guards are just an extension of currency borders.
If we move to a sound money international currency, what need is there for borders? People can produce and retain wealth where they live and earn on an equal footing with the rest of the world. It will reshape this nationalism rubbish, its just a protectionist racket for those who don't have valuable labour.
Once labour is paid its real value, people have the resources and nations have to conform to the rule of those generating the value.
Uptiopian AF i know, but why not move towards it?
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2008 was pretty horrible. I honestly think a lot of people are still recovering from that even after all of these years. You certainly made some good points about the benefits of crypto currency. Especially the fact that it can be split up so many ways. That could really have an impact down the road.
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I think its still a misunderstood secret of crypto not many people know its okay to buy just a few satoshis that you can spare and because of that they don't bother getting in. If we look at real estate, not many of us can qualify to get into that game.
If we look at stocks, the fees alone would make it pointless for smaller traders and sure you can do robinhood in some countries but its not very practical
Very few people are going to own bonds only through grouped investment vehicles.
This is the first asset you don't need any help with apart from gold, you just buy how much you can afford and you in the game. I think that message should be pushed harder
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That is true about being able to buy as much as you want, but at least in the US, we still have pretty decent fees to get involved. The majority of people use services like Coinbase that are known to charge fees for transactions. It is the easiest way for a lot of us to get some skin in the game though. The fees are one of the reasons I waited so long to start doing some automated buys. If I am only putting in $20 per month and I have to pay $2.50 in fees, it really cuts into your bottom line.
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Hmmm that is quite pricy is there no other services you can use? 10% is a bit steep, even moonpay I can pay with a credit card for like 3.5% fees and get lightning sats and ping them around for next to nothing.
Here I have set up a auto buy with a company called LUNO I do a deposit each month which is no charge on their side but the bank does. Then I set a daily buy order and it charges me 0.10% per transaction which I am fine with
Then I add it to the savings account in the app and I let the interest cover my fees which is basically like 5 days of interest so I've got a pretty good operation going here
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All that easy money has to work it's way somewhere and an asset that nobody can just magically create more of would be a perfect asset.
Exactly, it's dumb to think BTC will go away if ALL assets keep increasing how can homes, stocks, bonds and all this other shit increase but BTC not, in fact BTC should become the one that fairs the best since its the newest and still has a way to go in terms fo exposure to cheap money versus the other assets
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thank you very much for sharing, have a good day and a great mood