Innovations in wallet and exchange technology appear on a weekly basis. And the USD value of Bitcoin has rebounded numerous times from the annual drop in value of this still nascent currency market.
Yes, I know Bitcoin price has lost around 50% of its USD value this year, but as I explained previously in the article "Why Bitcoin Value vs The Dollar Doesn't Matter (and never will)", things are going to change in Bitcoin's favor soon enough. As with anything truly great and revolutionary, the best is yet to come, and you should expect spectacular results. It took almost 25 years for Steve Jobs and Apple to come up with the iPod, which exploded Apple into a global technology superpower, and not just a niche computer company. "Colonel Sanders" of Kentucky Fried Chicken fame had to wait until he was retirement age to see KFC become a household name. Bitcoin is just in Year Six of its gestation, and many are just impatient. Many just want it to rule the world now, and are willing to sell out its core virtues in order to do so. Have a biscuit. Relax. Read an Andreas Antonopoulos Bitcoin book. Good things come to those who wait.
Today, I'm going to update you on a couple of benchmarks that should add many brighter days to "The Future of Money". One is obvious, and one more insidious to our mainstream economic brothers, which may tilt things in Bitcoin's favor. Many in western society see Bitcoin as a high-yield investment and won't accept it as anything more than that. Fine. That is a very narrow scope, but Bitcoin has something for everybody, so let's look at its future investment value potential going forward.
2013 was an incredible year of growth, with the height of Mt Gox trading bots and the desire of mainland Chinese flooding into the market in demand unabated at least initially. Bitcoin USD values rose from $13 at the start of the year to almost $800 by year end. Logic dictated that this level of growth couldn't continue, and needed correction. Mt. Gox's collapse and the Chinese government handled that. Now levels are much legitimate, and the future is still fraught with plenty of growth potential, as I'll show here.
The first sign up ahead that will be a boon is the halving of Bitcoin production is 2016. Anyone with 5th-grade levels of economic understanding will agree that when you cut production or availability of an asset in half going forward, the economic value of that asset must go up in the future, if all other things remain equal. With Bitcoin acceptance and ownership only showing consistent growth over the last five years, there is no reason to foresee a drop in demand. It may level off; it may continue to grow, but a significant drop in demand is not in anyone's crystal ball, even the most ardent of naysayers. Bitcoin has built a solid foundation of adopters who are spreading the word across the globe. Nation states are attracting more attention to Bitcoin through "The Streisand Effect" by condemning Bitcoin rather than letting nature take its course. The more people hear about Bitcoin versus common fiat currencies, the more people see the intrinsic value of a fully digital currency not directly governed by any centralized force. Bitcoin is in the right place at the right time. The only real question is how far does this rocket go upward? Governments seem only strong enough to create black markets locally, and/or move mainstream adoption to more freedom-based locals. Bitcoin is not designed to be directly assaulted by centralized interests.
So the coming future halving of Bitcoin production in about two years is going to be a boon to the overall value of each unit of measure. And an even greater catalyst looms in relation to the overall fiat currency markets. The dollar is having its own issues as I've gone over before, so it should be understood that the clock is ticking on that front. But what about in Europe, another emerging hotbed of Bitcoin growth?
During the beta test for this criminal act made legal, when Cyprus bank depositors were ripped off to protect the wealthy, Gold prices in March of 2013 were hardly affected. Bitcoin price rose from less than $20 March 1st to over $135 at the end of March, an almost 700% increase in USD Bitcoin price. Those locals affected headed for cover into the emerging Bitcoin market. Considering the fact that a mere $500 million Bitcoin market, at the time, is easily swayed by a swift influx of new money, it's not hard to understand the explosion in value. So consider that a warning shot of what is to come. Beta test: Successful.
Now look towards 2016. The E.U. and its corrupt/insufficient economic policies have been so ineffective that they have let it be known that a massive "bail-in", call it "E.U. Bail-In 2.0" is coming for January 2016. How it will work is any deposit over 100,000 Euros will be absorbed by the bank. They're proud of it! Aren't they so clever?Trust them, it's for their own, I mean your own good. At least they are telling you up front that they will steal Europeans' money. I see this as a small step forward for them, ethically. You have been warned that the E.U economic system is failing, and you have plenty of time to respond to this theft in plain sight.
In Cyprus, citizens were robbed while they slept, like the Indianapolis Colts did to their city in moving to Baltimore 30 years ago, under the cover of darkness, and away from any local media/public scrutiny. It was business. Nothing personal.
The context here is if a very small country like Cyprus going under financially can cause over 600% of growth for the USD Bitcoin value, and no movement in the Precious Metals markets, what would the entire E.U. proving to Europeans that they are insolvent do for Bitcoin value going forward? If that isn't a hint and a half that fiat currencies are on their last legs, nothing is. The governments and private banking interests they are beholden to are basically daring you to move your money out of E.U. banks into anything else. They don't think you have any other choices but to bend over and take what new levels of corruption they give to you. Government and private financial institutional arrogance, plus corruption, equals potential exponential growth for Bitcoin in the future. Why not let experience be my guide? It's better than some bureaucrat that's in bed with a central banker. 2016 will be the Year of Bitcoin, at least from where I sit. If you have the heart to be a long-term player in Bitcoin, you will reap the rewards.
Of course, this is all just pie-in-the-sky speculation. Seek your investment advice, but what do you think this future mega bail-in means for the E.U., for the Bitcoin price, and for the future of fiat currency vs. Digital currency? Share above and comment below.
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Last modified (UTC): October 21, 2014 2:46 PM