Doge To The Moon
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It's been over a year since my first post on crypto and Bitcoin. Now that Bitcoin broke $50,000 let's revisit this topic. When I first wrote about crypto in 2019 Bitcoin's price was around $7,400 and today it has risen ~640% to $55,000. Does this mean I was wrong in my analysis on Bitcoin? I don't believe so and this scenario was well within my expectations. You always underestimate the stupidity and irrational behavior of the mass. That is fine because not every person is a billionaire. The recent GameStop fiasco further proves my point. On the other hand, I will restate that hedge funds and other financial institutions TRADING (not investing) bitcoin and cryptos are incredibly smart because those who buy crypto are mostly unsophisticated and these institutions are just slaughtering them for dinner.
But Wait, Didn't Elon Musk Buy 1.5 Billion in Bitcoins?
If what Elon Musk tweeted was true, then no Elon did not buy Bitcoins personally. Rather, Tesla did. Elon's company is a different entity. Of course Tesla would be willing to receive Bitcoin as payment. Who wouldn't want to sell more cars? This action will increase the demand for Tesla's cars because people who own Bitcoin through illicit means can now actually spend Bitcoins on Tesla's cars. The US government deems this legal and there is nothing wrong with Tesla doing this.
Doge To The Moon
Elon is famous for tweeting about Dogecoins going to the moon and all sorts of Bitcoin related comments. I am pretty sure he is just being satirical and is amazed at how cryptos and their fanboys are so stupid (I don't speak for Elon Musk). Dogecoin is literally created as a joke and even Doge can go up in value. That's why Elon says it is going to the moon as a joke. He tweeted Bitcoin is almost as bs as fiat money, which I totally agree with. For all of you Bitcoin fanboys out there, I agree that the current fiat money system is screwing the average person over, but that does not mean Bitcoin is a good alternative/investment.
Elon tweeted a video on "Cryptocurrency Explained" and you can tell what he thinks about these coins. As I repeatedly said on my blog, investing in gold is not a wise decision and this video further proves my point. If you agree with me that gold is a poor investment, why would the so called digital gold be any different? Bitcoin is NOT finite because you can create Bitcoin Cash, Dogecoin, Litecoin, and other coins you can think of. The only reason Bitcoin is so high is because it is the most popular coin that most lemmings know and it has nothing to do with Bitcoin being fundamentally more precious than other coins. However, since gold lasted this long as a horrible investment vehicle, I think Bitcoin is here to stay. Again, that doesn't mean it is a good investment. There is no logic behind investing in Bitcoin other than finding a greater fool to buy your bitcoin at a higher price.
Bitcoin Will Never Replace Traditional Currencies
Currently, the United States of America is the most powerful country in the world in terms of military power and we sanction individuals and countries like North Korea and Russia through the banking system. I am doing this analysis regardless of whom the next most powerful country will be. We have heard that Russia and North Korea are using cryptocurrencies to bypass US sanctions to trade with other nations (I am trying to be as apolitical as possible). If Bitcoin can bypass US sanction and America is the strongest global power, what do you think the US government will do? Eventually, the US government will limit the usage of cryptos because it threatens their control of the global financial system. Why do you think Facebook failed to create Libra? The moment the US government deems Bitcoin to be detrimental to the financial system they will limit/outlaw the usage of bitcoin and these coins' values will plummet.
China, the second largest economy in the world already banned crypto exchanges because it knows people are smuggling money out of the country through these coins secretly. Moreover, the whole point of Bitcoin was its decentralization, but China controls >80% of the global Bitcoin mining power, which means China can actually control the whole currency and can block/erase transactions if they wanted to.
Happy Doge to the Moon