Bitcoin reached a new all-time high above $58,000 over the weekend. Monday and Tuesday were in contrast a cold shower for it, with the price dipping below $45,000 per BTC. The market is now resembling a rollercoaster ride, with the price flying in both directions, taking a huge amount of stops off traders and investors.
Last week’s milestone was not just about breaking the $50,000 level. It was the simultaneous rise in capitalisation of the first cryptocurrency above USD 1 trillion. Now Bitcoin has a second target of $2 trillion in addition to the $100,000 target.
A bitcoin price of $50,000 could somehow survive the regulators. So, what do you think, 30-40-50-70, who cares? But the rise in capitalization to $1 trillion is effectively a verdict on today’s financial system. There is a new asset class that does not depend on governments and central banks. It cannot be taken under control, its issuance cannot be inflated by issuing unsecured money, etc. And, worst of all, the more the new reality reaches investors, the faster Bitcoin begins to grow.
What should regulators do with all this?
The battle of evil against good has already been lost. The good (Bitcoin) has won. However, the losing army still has reserves and is desperately fighting back, trying to postpone the inevitable.
Earlier this week, the owners of the old financial system went all-in. It’s unclear what kind of leverage Elon Musk had to take, but he suddenly announced that bitcoin was overvalued. Bill Gates immediately appeared, saying that he did not own Bitcoin, but investors should be extremely careful with them.
And the cherry on the cake, of course, was a statement by US Treasury Chief Janet Yellen, who expressed the view on Monday that Bitcoin was a speculative asset.
How was Bitcoin supposed to react to the firing of all guns at it? That’s right, the first cryptocurrency falls on panic sell-offs. Most of them are exits from speculators closing their long positions with leverage on margin calls.
Looking at what is going on, the next version that no longer seems absurd comes to mind. Perhaps the world’ powerful simply did not have time to buy Bitcoins at good prices. And now they’re scapegoating the first cryptocurrency, giving “knowledgeable players” a chance to buy good volume during the panic.
If in the next 5-10 days we see Bitcoin price above $60000 per 1 BTC, then our version will turn from absurd into absolutely logical.
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