Crypto Global
Is there a Bitcoin Bull Run coming?
Nov 3, 2020
In today’s article we'd like to discuss how cryptocurrency continues to enter the mainstream. So much is going on in this area at the moment. But what is different this time?
What we have right now is that there are big banks in the world talking about their own blockchain platforms. This is part of a bull signal for Bitcoin. In the world of fiat currencies, Bitcoin is now gaining ground. So it all seems as if you are looking for a "safe haven" because we have lowered interest rates, the demand for gold and Bitcoins have increased. We are lacking fiscal stimulus in both Europe and the US and we can see real-time economic data shift across Europe and we believe the US will follow suit. In addition, the virus has surfaced causing this problem again, so all of these factors are affecting this bankruptcy stage. The only answer we have is either more monetary or more fiscal incentives. More money from here means interest rates will go negative. In terms of more fiscal, this means that governments will launch large fiscal packages and the central bank will try to monetize them to help the bond markets. Every single country in the world is currently pursuing this strategy of printing money. And that lowers the relative value of the fiat currency as a whole. This is not just a story of a single leading currency, but affects all currencies around the world.
We saw this onslaught on Bitcoin for the past week. Bitcoin futures have crossed the $11,500 mark, which was a major drag, and are now positioned at $13,000. It really seems that the incredible shift in perception around Bitcoin has taken place in the past few months, which is very different from the previous cycle.
With numerous central banks holding political meetings, particularly the Bank of Japan and the Bank of Canada, it remains to be seen how to enter the next wave of Covid-19. All have provided some fiscal and some monetary stimulus. But one of the most interesting things to start discussing is central banks that use digital currencies. It is believed that it is easier to use to stimulate certain areas of the economy. If you study the ECB papers, the IMF papers, the BIS papers or the Fed papers and the Bank of England papers, they all say that Bitcoin is essentially staying here, and you will not even try to compete with Bitcoin. You basically want to create a digital world, so you regulate everything and make sure that this is a legitimate part of the system. So you bring in the digital currencies of the central bank and everything becomes interoperable. Everything connects with each other.
The central banks are creating their own digital currencies, realizing that the whole world is focused on this new digital world, and this raises a whole host of other questions about what control they have over individual citizens when the direct banking relationship with the central bank consists. We don't know what kind of world this is, and Bitcoin gives us an option from that. We believe Bitcoin will continue to play a role as the pristine reserve asset in the world for individuals, corporations, pension funds, etc. It is an incredible asset with limited supply as demand grows. With regard to the other cryptocurrencies - i.e., altcoins - one must not forget that they all play a different role in this ecosystem. This is not a currency game, but a whole new way of financing and digital trust. This connection of all these systems is coming. And the task of the central bank for digital currencies could be the platform through which everyone can integrate into our everyday lives with regard to the user-friendliness of on-ramps and off-ramps. In no way does it look like they are banning or trying to stop cryptocurrencies. You understand and it is clear that this technology has become indispensable.