Bitcoin price reacted to news about the acceptance of payments in cryptocurrency by Tesla extremely weakly, and billionaire Ray Dalio is waiting for a complete ban on BTC by US authorities. Meanwhile, financial giants Fidelity Investments and Goldman Sachs have filed applications with the US SEC for Bitcoin ETF.
What do these events mean? How large is the threat of a real Bitcoin ban in America? How and when will BTC move forward to become another financial market.
Regarding the recent growth of Bitcoin: there was a pump, of course, the coin did not fly away by $ 70,000. Tesla not only kept its word and started accepting BTC payments but the company carries out transactions for cryptocurrency without converting to fiat. This is a long-term bet on Bitcoin as an asset to accumulate value, and it is a clear example of the time for other corporations in the upper echelon of the financial world to adopt this approach.
Why, then, did the market give such a weak reaction? Because in our understanding, we still have a very long struggle for the formation of bitcoin as an equal financial asset. This is a long game, and in fact, it is even better the price keep trading at the current levels, and does not skyrocket through $ 100,000 and beyond.
We do not need a bubble to get rich here and now. It is better to continue the gradual ascent and delicately push aside first gold and then other financial assets. Their time is already running out, because the financial system will have to undergo a significant restructuring following the coronavirus crisis that began last year.
The first calls have already been received. In Canada, the authorities noticed how many pieces of paper they printed and announced the beginning of the curtailment of programs to support the economy due to the coronavirus. And although the United States promised us another $ 3 trillion, and the Fed leaves zero rates and cuts paper for a money printer, there is good reason to believe that these are just statements to support the current situation, and the financial machine itself is already preparing for a reversal.
Because let’s remind: helicopter money to save the economy is always only the first stage. The second one always comes for her, when this very extra money begins to be taken back.
All these payments in the form of trillions of US dollars in fact have never been free and the second phase will come sooner or later.
And when this next phase comes, then a lot will be decided for bitcoin, which will naturally affect its course.
Let’s note the news about new applications for bitcoin-ETF, and they were not submitted by anyone, but by the real giants of the traditional financial system Fidelity Investments and Goldman Sachs. Now we will analyze their actions in detail, and in conclusion, we still have to answer the claims of Ray Dalio.
First, let’s talk about Goldman Sachs’ application. This is not the first action of company aimed at providing their clients with access to the world of cryptocurrencies. There is no direct access to bitcoin in this application, but the bank’s clients will be able to obtain it indirectly through another fund that will buy cryptocurrency through Grayscale. And if you want a scary chart, here’s how much bitcoins are currently at Grayscale, only $ 45,000:
Let’s see if the interest from Goldman Sachs can turn the positive premium to the value of the Grayscale crypto fund shares. Because on the one hand, this is a sign that a steep rise will begin soon, and on the other hand, a negative premium indicates the sale of shares, and this, as you yourself understand, is not the best signal in terms of investor interest.
As for the application itself from Goldman Sachs, the management does not want to openly show their interest in bitcoin. But they are also afraid to stand aside from the market so as not to be left behind at the last moment, so they build indirect bridges.
With Fidelity Investments, everything is much clearer and more transparent. It is not the first year that they have been discovering the world of cryptocurrencies, and they began to do so even when many skeptics did not believe that Bitcoin would be able to approach the price of $ 20,000 at least once in history.
The submitted application opens direct access to bitcoin, which can be purchased on the traditional financial market. The US Securities and Exchange Commission already has five similar applications, and nothing prevents them from approving all at once. If this happens, the bitcoin market will become one step higher next to gold, showing who is an innovative investment asset here, and who has to go to the dustbin of history.
Returning to the topic of ETFs clearly shows that the financial system is ready to accept Bitcoin as an equal asset. The world is changing, and the laws by which cryptocurrencies exist are fully consistent with these changes. This is not the money of the future yet, but an important step forward in the right direction.
Billionaire Ray Dalio said earlier that the authorities do not want other money to work or compete because the situation could get out of control.
Based on this reasoning, he comes to the conclusion that the US authorities may agree to ban bitcoin, citing analogies with the ban on gold back in 1933. Could this happen? Let’s think about it and start with the fact that in 1933 gold was not banned, it was confiscated in favor of the state to dramatically change the financial system. But look what happens today, if you want gold, go buy it.
That is, then they took away the old in order to build a new one, and in such a context it is much more logical to confiscate “old” dollars in order to untie the economy from them once and for all. Objectively, we have very little chance of seeing something like this. But they will not solve the problems of the dollar at the expense of bitcoin, because, firstly, it is not so easy to confiscate it.
And secondly, bitcoin is not a threat to the demand and supply of the dollar, for which the US authorities should be so worried, according to Dalio. The supply and demand of Bitcoin is regulated by the code, no confiscation or anything else can change the current emission schedule, this is the simplicity and genius of the first cryptocurrency. No amount of government action simply can lead to bitcoin control, and therefore makes no sense.
At the same time, Bitcoin is a reliable financial system that has already accumulated a huge amount of assets. And if the US authorities have even a drop of common sense, they are able to understand that these funds can act as support for the entire world financial system, even their dollar. This is a new asset, on the basis of which one more market can and should be built. And this is exactly the future we see for Bitcoin.