Future of Cryptocurrency
- Halving events remind that Bitcoin can end mishandling of global monetary policies.
- The US Central Bank poured fiat to the commercial banking system now at $7.17 trillion.
- Paul Tudor Jones of Tudor BVI applauded Bitcoin’s growing role as a hedging asset.
- Peter Schiff warned that the Fed has lost its credibility.
- Embrace monetarism or choose Bitcoin as a firm, safe haven for money.
On May 11, 2020, a miner took Bitcoin’s 630,000th block out of its digital depths, earning a 6.25-bitcoin reward. Before this momentous event, the mining reward had been 12.5 bitcoin.
On Twitter, #BitcoinHalving trended as crypto fans from all over the globe huddled online to pay tribute to the digital currency’s third halving milestone. The cryptocurrency’s latest halving happened during the global pandemic’s lockdown period. Consequently, the community had to skip the phenomenon’s usual social events.
Bitcoin can end the irresponsible handling of monetary policies
Celebrations moved from beaches, bars, and barbecues to Twitter, Zoom, and YouTube. Bitcoin Magazine live-streamed the occasion at BitcoinHalving.com. Andreas M. Antonopoulos, the famed Bitcoin educator, and author, took the audience back to the digital currency’s obscure days when Laszlo Hanyecz paid 10,000 BTC for two Papa John’s pizzas.
Bitcoin is now firmly in its fourth epoch. The cryptocurrency’s pre-programmed halving feature ensures that there will only be 21 million mined BTC.
The 2009 Genesis block reward was 50BTC. The Satoshi token’s first halving in 2012, dropped its reward to 25 BTC and then lowered to 12.5 BTC in the 2016 second halving. These halving events are a succinct reminder that Bitcoin can end the irresponsible handling of global monetary policies.
The first two halvings occurred during periods of relative economic stability. This latest halving just as BTC’s conception has occurred amid massive, expansive rescue plans.
The Significance Of The BTC Third Halving Event: The Present
Launching in the aftermath of the 2008 financial deregulation crisis, Bitcoin became a signal of the difficult financial times ahead. It also signaled the world’s need for a new and sensible monetary order.
This new system would make the printing of paper money from thin air, a redundant move. One massive event that took place just around the same period as the halving, gives this occasion’s significance more clarity. With just but a few computer strokes, the Federal Reserve injected $3 trillion into the economy from February 2020.
Scuttling to save the American economy, the super-powerful Central Bank printed fiat and channeled them to the commercial banking system.
On February 26, the Fed’s already massive balance sheet read $4.16 trillion. By June 10, days after the halving, this amount had escalated to $7.17 trillion.
Bitcoin as a solution to the inflation crisis
According to Dan Morehead, Pantera Capital’s CEO, the US printed more money in those three months than it did during its first two centuries as a country. In a letter to his investors, Morehead asked them to drop fiat and turn to Bitcoin as a solution to the inflation crisis.
Calling the high-speed, massive bond-buying and fiscal spending the “Great Monetary Inflation” billionaire investor Paul Tudor Jones of Tudor BVI applauded Bitcoin’s growing role as a hedging asset.
American libertarian, gold bug, and stockbroker Peter Schiff warned that the Fed has lost its credibility:
“Any credibility the Fed has left will be lost. Federal Reserve Notes soon won’t be worth a Continental.”
With the Federal Reserve, adding a monetary value of 6.6 percent to the global economic output from nothingness, the developed world’s financial future is now more uncertain than ever.
The largesse of central banks is the reason Bitcoin was made and over a decade since its creation, Satoshi’s vision has never been clearer.
Bitcoin now as rare as gold: What the future holds
In stock-to-flow terms, BTC is now as scarce as gold.
As fiat currency losses dramatically, Bitcoin’s third halving makes it twice as hard as it was before the event as an asset. In its infancy, Bitcoin was purely an electronic cash system, which would work on a peer-to-peer basis. Institutional interest has significantly dimmed this narrative. It is now a hedge asset sought after by some it’s vehement past critics.
Bitcoin as an investment-grade asset has become a reality as its supply limited quality shines through in an era of endless money supply. Jones neither a crypto nut nor a hard money diehard says that the coming recovery after the pandemic will differ from other past comebacks. Banks can lend more aggressively and demand will keep goods and services prices affordable. Pundits say that inflation will be veiled in asset prices.
All these successful investors say that it is time investors trash the last decade’s financial playbook. Embrace monetarism or choose Bitcoin as a firm, safe haven for money.
As expected, outrageous price predictions marked the third halving. As an illustration, Real Vision’s founder and CEO Raoul Pal projected a long-term value of $476,000 after the halving. Despite the buzz the halving had created in crypto circles, Andreas Antonopoulos was less steamed up.
“A whole lot of nothing is going to happen, for now. The monetary effects take quite a while to make themselves felt in the markets… It’s going to take a long time before the signal from the fundamental change in the inflation… becomes a dominant signal that is felt in the market.”
There was general euphoria that Bitcoin would take the world by storm. From the eyes of bank depositors the storm is not good as it will uproot commercial banking and result in a decline in depositors leading to a negative for bank top-line revenue. Embrace monetarism or choose Bitcoin as a firm, and safe haven for money may be a tough decision to make for them.
Banks can lend more aggressively and demand will keep goods and services prices affordable. Pundits say that inflation will be veiled in asset prices. This may be so but there are still many concerns and worries swirling around bitcoin technology and its capacity to disrupt traditional financial systems.
Cryptocurrencies, bitcoin primary among them, are still reliant on the underlying infrastructure powering cryptocurrencies like Bitcoin, much of which is located in China. The Chinese government could theoretically impose its will on the data miners who keep them running. So, for bitcoin to be trustless, it really needs massive adoption.
Sofia Lee, well known Content Editor at Cryptopolitan. She loves to create wonderful write ups of real value that serve the Finance, Crypto, and business audience. Her hobbies are travelling and reading scientific stories.
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