Question: I like your recent note on Bitcoin, but why did you pick the $100k mark as the inflection point?
My Response: When bitcoin hits $100k, it will assume a new status and that is political. Because many retirement and pension funds are investing in BTC via ETFs which have been approved by the US regulators, any politician who goes after BTC will have to deal with electoral consequences because the value which would be affected will be consequential and will affect most workers.
Simply, above $100k, politicians will have limited options because you have now a “systemically important coin (SIC)”, picking the analogy of SIFI: ‘a systemically important financial institution (SIFI) is a bank, insurance company, or other financial institution that could trigger a financial crisis if it fails. SIFIs are also known as “too big to fail”’. As a coin, the future of Bitcoin is largely assured, post a $100k mark.
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This comment explains it elegantly:
The cause of this, though, is that bitcoin is still a store of value, not a means of trade and exchange yet. The moment it becomes a fiat or accepted currency of trade … maybe that “well” will change to a “bell.”
Bitcoin’s total market value is now more than the entire South Korean stock market and when it gets to 100k+ …it will transform the way fiat money is viewed and with more people having faith in its durability…it might just become a defacto systemically important world currency …to big to stop …to big to fail and too politically hot to touch.
The prospect looks very scary when you consider the fact that the United States has used the dollar as a weapon of sanctions. If the world congregates and adopts Bitcoin, assuming that it can evolve into a means of exchange at scale, what would be the long-term future of the US dollar? Also, for currency traders, why waste time with fiat currencies when the supreme currency is available. I do posit that the US wants that supreme coin to feel good in America.
Today, the UK regulators joined the US: “The Financial Conduct Authority (FCA) will not object to requests from Recognised Investment Exchanges (RIEs) to create a UK listed market segment for cryptoasset-backed Exchange Traded Notes (cETNs). These products would be available for professional investors, such as investment firms and credit institutions authorised or regulated to operate in financial markets only.”
Question: I like your recent note on Bitcoin, but why did you pick the $100k mark as the inflection point?
My Response: When bitcoin hits $100k, it will assume a new status and that is political. Because many retirement and pension funds are investing in BTC via ETFs which have… pic.twitter.com/DRmfvNElbi— Ndubuisi Ekekwe (@ndekekwe) March 11, 2024
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Welcome to the world of financial engineering on steroid. When we are done with all the gymnastics and acrobatics, we return to the basics: food, energy, shelter and clothing. Everything else is mere accessories.
May you live in interesting times.