When you listen to Michael Saylor it doesn’t sound so high risk. The current dollar printing and foreseen dollar printing (think it’s called M2 money supply/monetary policy) the dollar loses about 15% of its value a year, so more than the amount of inflation they even say out loud that they aim for which is about 2%. So it’s burning a whole in their pockets and it’s something that big companies have tons of just sitting there. For a big company with billions or trillions of dollars it’s relatively low risk to put 10% into a hard asset that’s supply is capped and continually constrained (unlike gold where more can immediately be mined and flood the market).
So once FAANG allocates a small amount of their treasury to it, it’s not only low risk for them since it’s pocket change but it further validates this whole idea and almost immediately makes them more money than they put in by vastly reducing the supply, it just snowballs. The institutional FOMO puts the early institutions that allocated peanuts (to them) in dollar terms, in a unique position. Where it goes from there is the real question that’s highly speculative.
I think the main take away is that maybe this time BTC won’t have such a nasty correction because the smart money that got in early won’t sell. Alts will probably endure a correction like bitcoin did after 2017 as it’s still all retail and that will once again burn retail and kill off dead coins or struggling projects so that the cream rises to the top for big money to dip their toes in.
All theoretical macro thinking to hopefully have an idea of what to expect if any of it begins to manifest.
So how do they rule the world? You mean they just jointly buy up all the available bitcoin raising the price beyond what others can afford or do they also get involved in mining? Surely when that happens people and other companies shift to eth - or whatever?
I’m not fully subscribed to this idea and was being slightly facetious with the whole “bam now they rule the world”. To entertain the idea though, how hard would it be to keep the amount mined every 10 minutes under constant constraint/heavy demand? Not hard. They can’t and wouldn’t want to own all of it as then it wouldn’t have value they just want a large slice which is easy for them. Say even if FAANG was late to the party by being conservative, they could still afford to secure a position for themselves because they have so much money. If governments are last to the party they could just print their position but what does that do? It makes everyone else’s BTC position that much more valuable and the fiat that much weaker, subsequently bringing a satoshi closer to parity with a dollar. If that that happens maybe it takes a decade?? I really don’t know.
There’s also the idea that of CBDC’s being created by governments to enforce a sort of ‘Behavioral Economics’. I would suspect the goal of that would be to lower economic disparities by charging interest on accounts money hoarding and accrue interest to those who are bad at money saving (the poor). They would get control and transparency and ease to tax every individual in one go. This seems like a high likelihood as it’s almost any governments modus operandi. They also could go to infinity with negative interest rates and QE apparently too.
How does that play with the BTC narrative mentioned above? Not sure. Maybe it deflates that idea entirely, or maybe BTC becomes a reserve currency? Though I don’t think that would play well with the idea of infinite money manipulation so if fiat was backed by BTC then maybe it’s finally some responsible monetary policy?
I’m not trying to be Nostradamus or subscribe to those trying to be either but I am entertaining these theories a bit. Hopefully that’s not unhealthy but I also want to try and understand what potential gain or underlying benefit to those involved is. Human behavior is a real wonder but I’m also curious if it’s predictable as it sometime seems. One thing is for certain, only time will tell.
That Raoul Pal guy is applying Metcalfe’s Law to BTC and ETH, matching up when both got to 1 million unique addresses makes Ethereums price action match up with Bitcoins 2016-early 2017 price action. He suspects ETH goes to $20,000. Who knows if it follows the same path as the awareness is different this time. One thing I add to this theory is that crypto markets inflict max pain on the so called “dumb money” aka retail aka the little guy as to get their liquidity and flush them out until later. So I think alts will experience a massive correction (including ETH) since many retail see it as the next cheapest option to the already too expensive Bitcoin. This also separates the wheat from the chaff in terms of projects out there (like the dot com bubble). The gains made late in the year and late retail will flow money into the next thing on CMC or whoever markets the best like the ICO stuff.
This time around I’m trying to step outside myself and observe others to see if I can spot the euphoria for what it is. I’m trying not to get too attached to these moonshot targets or super cycle theory though it’s looking more likely by the day with this market cap cycle peak not being near a peak at all, the alignment between this cycle and 2013. Seems possible and tempting but maybe that’s the point??
Yeah, don’t worry - I got that bit! I can understand Microstrategy, Elon Musk etc investing in Bitcoin right now from the financial point of view, and that once invested they might seek to protect those investments, but to control it would be harder. Unless they can take over the core development team they might find that future developments - which should lead to more decentralisation - don’t go in their favour. As you point out, with too much corporate ownership and control the value would be gone.
Not making any particular point here btw, I’ve just come across this argument that corporations will control it a few times lately and am wondering if there’s something I’m missing.
The way I see that possibly happening is government lobbying, regulate it in a way only accredited investors can trade/buy etc. Then manipulate it’s use and worth etc. So take the coin out of the hands of the people if you see what I mean.
Sounds conspiracy like, but I feel it’s very possible. Even now with folk cheering ETFs etc. and the trading instruments being used it feels like greed will drive the common person right into the flytrap. If I was a gov I would be delighted with this direction, fully traceable cash controlled by the usual suspects. It’s likely a slam dunk.
Yes I think this is entirely possible, although probably easier for governments to create their own digital central bank currencies, as China is doing right now, rather than co-opt bitcoin. I can certainly see a lot of clamping down on who can do what with crypto and where it can be bought and sold, an endless game of whack-a-mole. I feel the technical genie is probably out of the bottle now but the economics and how such efforts would suppress prices are much less clear to me.
I agree, but I don’t think it’s co-opt bitcoin I think it is remodel bitcoin into a state / corporate tool plus have the gov (central bank) issued “local crypto”. Then it’s business as usual and nothing much will have changed except we have huge energy bills (another corporate boon).
Haven’t heard that one. I was eluding to not that they control bitcoin or core development (as you said that takes away its power) but rather that they have more power/influence in the world because those who hold a large portion of the overall supply would be like a privatized Fort Knox. Something like that. Not sure if that comes off clear or not.
Another twist on it could be like what you say here but the behavioral economics of a government issued CBDC makes the middle class and lower class merge into one class, under the auspices of economic equality but the corps get to use Bitcoin as a tool to hold and borrow against. Further separating the haves from the have nots. So a two class system.
That’s as conspiratorial as I’ll get
Not sure how far off that really is but also don’t know the benefit really. More control? Private companies have more power and access to capital and the working class keep in their lane?
Going down a rabbit hole now.
The maximum amount of bitcoins is just a number in the miners’ configuration file. I personally would not be surprised if one day it is changed, the control over bitcoin becomes more and more centralized…
It could but that would destroy one of it’s sole purposes and for many reasons I find that highly unlikely any time soon, maybe in a hundred years and a completely different generation has different views. Maybe it won’t even be around or be considered antiquated.
If an alien species landed in times square and offered the world incredible almost magical technologies, what forms of payment would they accept for the trade?
I see what you mean now. I got a notification from them during the ETH dip this morning that my loan to value ratio got up to 76%, and at 83% they would start liquidating…problem is, my LTV ratio never actually got up past 45% according to market charts.
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