We live in a fascinating time in crypto at the moment. The halving is just a few days away, and, amid global economic crisis, never before has there been so much attention on Bitcoin. In the coming days, I believe we will see play out the same thing that happened in the wake of the first two Bitcoin halving.
That is, whales getting the hopes and dreams of people up by running the price of Bitcoin higher in the days ahead of the halving. Everyone would think the price was only going to pump to extremely high levels. But, I think, instead, the whales are going to dump holdings and the price will fall, crushing everyone’s dreams. I think we’re seeing exactly this play out before our eyes. As we sit above the $10,000 level, the price is reflective of the hype. But, the whales are lying in wait, just as happened in 2012 and 2016. A dump is coming.
This time around, there is an X factor that we did not see during the first two halvings; namely, “The Great Lockdown.” That’s what the International Monetary Fund dubbed the response to the COVID-19 epidemic. It’s something we must factor into the equation as we analyze the Bitcoin market, as well as the greater crypto market.
I can’t predict how that’s going to play out, especially when it comes to the injection of capital. There’s $3 trillion in debt that has been injected so far into the U.S. economy, and many predictions posit the final total at around $10 trillion––unprecedented amounts of spending. And that’s coming quickly. It has too. We’re facing Great Depression level economic crises. This leaves many speculating the price of Bitcoin will rise. So far, though, since central banks worldwide are printing money, as well, the dollar has grown stronger. Its a hedge against “great monetary inflation,” he says.
However, if, as the crisis moves along, and the value of the dollar falls tremendously, the price of Bitcoin will then increase tremendously. This is the X factor that could prove me completely on wrong on the whale-led pump and dump. We’ve seen major hedge funds enter Bitcoin as a hedge. Paul Tudor Jones says he is buying Bitcoin futures.
At the end of the day, I am looking at the stock to flow model. Ultimately, the price will increase. It’s just like any other having, it just takes time for it to rebound. And, ultimately, it does go up in value. It took more than a year for Bitcoin to reach an all-time high. If you’re a Hodler, none of this concerns you. You realize Bitcoin was built to increase in value over time as a deflationary system, especially as more people adopt it.