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Bitcoin hit a new (higher) low on January 24 at $31,308 and has been enjoying a steady rise since and is now at as of writing and appears set to crack $44,000. Bitcoin enthusiasts will recall that Bitcoin hit a new 'higher' high on November 8, briefly surpassing $67,000. I can see Bitcoin riding waves and the waves keeps getting higher.
The waves are not made of water. They're made of . Many, many trillions in cash. Tens of trillions were created around the world just since March, 2020.
A couple years ago when Bitcoin attempted to claim the $20,000 mark for the first time, the talk of the town was that the 'Bitcoin Bubble' had reached historic level compared to the 'Dutch Tulip Bubble', the first speculative bubble ever, that finally popped... in 1637! This sort of things been going on for a long time...
Even I had my doubts about Bitcoin at the time, not seeing its true value and potential. 'There's nothing backing it up', I told myself often. I also saw the many articles attacking Bitcoin and these articles sort of backed up my belief that there was no true value in it. Since the start of 2020 however, my views on Bitcoin and cryptos in general have changed drastically.
I now see Bitcoin and decentralization as absolutely necessary as we transition into a 'brave new world' that belongs to us. Many might believe Bitcoin is the biggest speculative bubble ever while on the other hand, I see it's the instrument being used to purchase Bitcoin that is experiencing the biggest bubble in human history. Central banks have printed trillions and trillions of their currencies which causes their value to depreciate. Of course, Bitcoin will absorb as much of the cash as it can, acting like a cash eating machine.
Currency is a debt instrument and Bitcoin is simply reflecting the true value of the currency. Central banks are poised to raise rates this spring. The Bank of England has already raised by a quarter percentage point in January and they plan on cutting back on the money printing. With all the borders shutting down, this is sure to cause a recession. Cutting back and raising rates during a recession? Nahh, they might raise to one percent but the central bankers will be forced to lower rates again and turn on the spigots and spew out more cash (and more debt) later this year.
Bitcoin is not in a bubble and has the potential to smash $100,000 by the end of the year, depending on what actions the central bankers take. They have painted themselves into a corner and Bitcoin is acting like a mirror, showing the currencies' true colors. My bet is, the money printing will continue.
It will continue until it can't anymore. Until then, Bitcoin will continue to rise to whatever heights it wants to, so long as the money printing machines are left on. There's an 'infinite' supply of cash but a very limited, set number of Bitcoins to be created, fixed at 21 million with the last of the Bitcoins to be mined sometime around the year 2140. How much will a Bitcoin be worth then?
I can tell you how much it will be worth... it will be worth a Bitcoin! It's 'value' will be set by the individual who owns it.
It is simply non-comparable with the world's fiat currencies and I am no longer fooled. Bitcoin will never be in a bubble. It's just an illusion that it's 'worth more' in dollars, or euros or yen, etc.. Bitcoin is showing the world that all the fiat currencies are dying. The more 'expensive' Bitcoin gets, the more obvious fiat currencies are collapsing.
Long after those currencies have left the building, someone somewhere will be trading a fraction of a bitcoin for a nice, evening meal and a glass of wine.
The Bitcoin bubble is just an illusion, I think.
Tidbit: Bitcoin total circulation 18,953,050. There's only some 2,000,000 coins left to mine and it'll take about 120 years!
Update: By the time, I finished writing this article, Bitcoin surpassed $44,000! Go Bitcoin!
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