People do not seem to understand trends. Things go in cycles, ebbing and flowing over time. If one is aware of these trends, the future can become a lot clearer.
In the United States, as well as around the world, there is a sentiment that is festering against government. This was kicked into overdrive since the lockdowns due to COVID. However, we need to be clear, this is a much longer trend. Actions like the election of Donald Trump and Brexit show how many people are not accepting of government and politicians any longer.
With each passing day, this is mounting. Joe Biden took office under, to many, questionable circumstances. The percentage of people, not only in the US but around the world, who question the validity of his administration is significant. Not that it matters much since, as mentioned, it is part of a larger trend anyway.
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Then we have a Harvard Economist, a title that puts one at the head of the useless people class, spouting out how Central Banks will never allow Bitcoin to go mainstream. Once again, we have a person at a respected institution who shows how clueless he is.
To start, less people are caring about what the Central Bank says or does. People are simply fed up with the tyranny that is taking place. The Fed's policies have only served to expand the gap with income and wealth inequality. The 97% (or whatever it is) really could care less what the Fed thinks.
At the same time, the idea of Bitcoin going mainstream misses the entire premise of cryptocurrency. Bitcoin will go mainstream when enough of Wall Street buys it. That is where it is headed. Bitcoin is no longer the "people's money". Nevertheless, it did serve its purpose by opening the door to much more.
It is not Bitcoin that people should be looking at in this equation. Instead, it is the thousands of other tokens that are being set up and backed by usage. Here we see the potential of a massive Network Effect, spread across all the different nooks of the Internet, is the threat. When that goes mainstream, as they say, it is game over.
Of course, this Harvard Economist does not grasp this.
All of this points to a boom for cryptocurrency. When people distrust the government, capital follows. Thus, bond markets, which were already zapped in Japan and the EU, see massive outflows. This money has to go somewhere. Over the next few years, where do you think it will head?
One obvious choice is equities. The stock markets should see a major run if the floodgates out of public debt occurs. However, another area that will likely pick up activity is cryptocurrency.
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It is a situation that can be massive. If money starts to flow into the industry, it will be coupled with the expected Network Effect generated by users. Many feel we are nearing the point where a large number of DApps start to appeal to everyday individuals. This could open the doors for enormous user growth, which will help to provide a baseline value for the different tokens representing the applications people are interested in.
The challenge is that people look at cryptocurrency as financial instead of a technology. What this Harvard economist is saying is akin to the Central Bank not allowing Virtual Reality or 3D semiconductors to happen. It truly makes little sense.
Sure, Bitcoin can be managed and controlled since there are only 21 million of them that will ever be produced. That said, cryptocurrency, when taken in totality, does not fall under this category. Today, and going forward, anyone with an Internet connection can establish a token in a number of different areas. Thus, the idea of stopping token creation is already nonsense.
Then we see the fact that there is no way to halt people from entering the digital/virtual realm. This is the epicenter for cryptocurrency, not traditional financial institutions (or governments).
As we move through the next couple of years, it is likely that more people start to turn away from the idea that government is helpful. The corruption, globally, is now at epic proportions. It doesn't matter what party, in what country, they all end up telling the same story. This is something that people are not going to stand for much longer.
It is this growing sentiment which opens people up to cryptocurrency. As people realize the government is not operating in their best interest, economic implications become paramount. To start, when confidence in the government goes, the economy goes along with it. This sets off the predictive actions of the politicians and central bankers, none of which work. Ultimately, we end up with economies that becomes even more split with wealth inequality, further feeding the lack of trust.
This gets taken to an entirely new level when government default starts. There will be countries around the world, within the next 5 years, who default on their financial obligations. This is going to really hit those who relied upon the government the most. The Greeks were just a primer of what is to come. My guess is we see someone much bigger in Europe get the headlines in that area.
In trading, there is a saying: the trend is your friend.
Here we clearly see the trend is not in favor of governments and central banks. Interest rates on the 30 year US bond is already increasing. This is a debt instrument where the rates cannot be controlled by the Fed. Hence the market is already voicing its concern about government in general.
This is not some conspiracy, right wing theory. It is about the flow of capital. That tells the entire story. The push into gold starting in September 2019 during the Repo Crisis was a precursor of what was coming. We already see a massive run up in the price of collectible, everything from art to vintage automobiles.
It is only a matter of time before that capital starts to make its way into the other sections of crypto. When the current economic situation is collapsing, this will be viewed as one of the safe havens.
Here we see where government and central bank ineptitude is our ally.
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