Bitcoin was heralded as the solution to the financial corruption that is so prevalent in the existing financial system. The idea of peer-to-peer exchange of value was something that many believed would be the answer to what was taking place.
While Bitcoin took a long time to catch on, it is now getting to the point where it is "going mainstream". Unfortunately, what is taking place is not quite what many had in mind.
It is amazing to think back around four years ago and the attitude people had towards the big institutions on Wall Street with regards to cryptocurrency. At that time, many were wondering when would the big money enter. When would Wall Street see the light and start investing?
Of course, the reason for this was simple. People wanted the price of Bitcoin to run. They were looking at their wallets believing that when big money entered, it would skyrocket the price.
This was accurate of course. Since that time, we started to see these firms enter the mix.
Bitcoin's Hijacking
To put it bluntly, Bitcoin is in the process of being hijacked. The idea of people's money, as it pertains to Bitcoin, is over. This is going to be firmly in the hands of the establishment. Maximalists might not believe this but it is a guarantee.
Many discuss Michael Saylor and what he is doing. Over the past couple years, he was the first Wall Street firm to go all in on Bitcoin. In this regard, he is a trailblazer. His moves might have triggered some other firms, the biggest probably being Tesla to enter.
All according to plan. Keep getting other entities involved so that things can moon.
There is a problem with this idea. For those who believe Bitcoin holds any solutions to the tyrannical financial system, this is feeding that same system. Does anyone really believe this is going to be contained?
Here is the reality: Michael Saylor is a very small fish. When it comes to Wall Street firms, he is a nothing. Just look at the assets under management balances and you will see there are much bigger players still on the sidelines. Do you think they will remain there forever?
Fans of Bitcoin often discuss the cap of 21 million. The deflationary nature suits Wall Street and other entities very well. This cap means that the more that gets swallowed up by the major entities, the less there is for everyone else. Sure the early adopters make out well but that wasn't the point of Bitcoin, or so we are told.
(Central) Bankers And Governments
Another layer lurking out there, as far as we know, are the Central Banks and governments. Here we see the entities that can even dwarf Wall Street. Up to this point, they are still not involved although there are some rumors of some Sovereign Wealth funds buying Bitcoin.
Ultimately, Bitcoin will become a money game for the most powerful institutions. Since the acquisition is done through purchase, who can buy the most? Obviously, those with the most money. Who do you think is at the top of that list?
We already know most of the physical gold is in the hands of these two entities. Who has what is unknown but we know it is in the hands of someone. What do we think is going to happen with digital gold if Bitcoin does truly serve that purpose?
Just like the gold market, they will, along with Wall Street, swallow up most of what is available. There will be just a few crumbs left on the open market for everyone else. Of course, that is how they can enhance the value of their holdings: reducing the supply on the open market. After all, why would a central bank ever have to sell its Bitcoin?
This will pay off well for those who are presently involved in Bitcoin. Eventually, the supply/demand equation means they will have to keep pushing the price higher. However, it is important to mention, we all have our price. There comes a number that Bitcoin will hit that necessitates selling. There is no way around this.
Naturally, the number will be different for everyone. Nevertheless, when the big player enter, the price paid really doesn't matter. And every Bitcoin sold to them removes one from circulation, most likely forever.
Things often stray from their original vision. Just like the Internet, the freedom value of Bitcoin was hijacked. For that token, it is not going to exist in the future. The larger players will swallow up much of the float, leaving very little on the open market.
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