So we have a $55,000 dollar Bitcoin price. Many speculate it is due to the Fed’s dovish policies. While others are attributing it to the helicopter money that is being tossed into the American economy. And it is estimated that trillions more will be put into the legacy system before the inevitable occurs.
Yet, many on Wall Street will always say to not fight the Fed. However, it is my contention that we are living in different times. The amount of debt that has been created is truly unsustainable. And as I have said many times before a reset may be in order.
Many economists fail to miss the obvious when it comes to the entire blockchain ecosystem. It is at it’s core a separate system. The legacy system and blockchain are different. Although there may be some legacy integration (futures contracts) blockchain has very little correlation.
Of course traders will try to price anything. So Nasdaq Index fell and Bitcoin priced lower on the same day. Now there must be a direct correlation. I believe that is hogwash.
Interest rates will obviously effect all asset classes. Yet, we must understand that unsecured credit has not been introduced into the crypto sphere. And truly we don’t know if it ever will. Non recourse unsecured credit is always the fuel for bubbles.
The Fed will more then likely stay the course in terms of interest rates. And with the amount of debt that exists they could collapse the entire market with a hawkish tone. I guess the market is expecting more of the same.
Now I’m not discounting the Fed’s power over the entire market. They are truly a powerful organization which I would suggest is a bad thing for people. And on the grand scheme of things they still matter.
Yet blockchain is making every effort to change this. No central authority fixing the price of money. No silly meetings while the gamblers await decisions. True free markets that rely on actual price discovery.
Frankly, I don’t subscribe to the notion of Bitcoin/legacy asset correlation. I believe in the coming years that this theory will be proven correct. And this may occur during a potential monetary reset or other event. Although I can only imagine the volatility that will occur.
This assessment will change if unsecured credit is introduced. Fiat credit may propel Bitcoin and other crypto markets into the stratosphere. If this does occur we will then see a direct correlation between legacy and blockchain systems. Many maximalist may not like this occurrence.
As it stands blockchain and the legacy system are not one in the same. Although there are fiat on and off ramps this does not create much causality. Hopefully many investors will start to see beyond what legacy economists preach as gospel.
Blockchain was created for this very purpose. To give people the chance to choose a better alternative free from central banking influence. Now people will have to change their perspective on money. And a little knowledge and new perspective are good things. :)
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