You cannot build a house unless you have a strong foundation. After years of mockery and ignorance about Bitcoin and anything related, 2015 has proven to be a lengthy procession of plaudits for Bitcoin’s foundation, the ledger know as the blockchain. Being a former banker myself, I marvel at the double-talk lobbied by mainstream economic leaders like Jamie Dimon of J.P. Morgan Chase, but maybe I shouldn’t be so surprised at all.
Dimon made headlines last week on one hand saying the banking industry may see value in using Bitcoin’s Blockchain technology, but out of the other side of his mouth, vehemently deriding the digital currency of Bitcoin. He went so far as to say “Bitcoin will be stopped!” He was even incredulous in his hubris, shocked that this was still a question worthy of posing to an economic elitist like himself. If he doesn’t use it, or understand it, why should it exist? If it doesn’t help him, or his centralized bank, it must be worthless on this planet. Next question.
As much as Dimon and the rest of the financial establishment hate to admit it, they were wrong about Bitcoin’s technology three years ago not being relevant. They are wrong today about Bitcoin being a non-starter because Bitcoin has a strong foundation. So strong in fact that the banking industry is looking into using Bitcoin’s foundation because its far better than their own. Bankers are wrong an awful lot; I’ve learned over the years because they only care about their accountability to the stockholders, not ethics or innovative new technologies.
Banks and other major investors are having no problem throwing money at Bitcoin technology, easily setting a record in capital investment already in 2015. 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-risk, high-yield investment and won’t accept it as anything more than that. Fine. That is a very narrow scope, from the very narrow-minded, but Bitcoin has something for everybody, so let’s look at its future investment value potential going forward. 2015 was “The Year of the Blockchain”. I believe 2016 will be “The Year of Bitcoin.” Here’s why.
Bitcoin has Been Trending Upward all Year
2013 was an incredible year of growth in value, and mainstream attention built on the back of a bubble created by Mt Gox “Billy-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 2013 to almost $800 by year’s end. Logic dictated that this level of growth couldn’t continue, and needed correction, and that was where 2014 came in. The correction didn’t stop until mid-January of 2015, when prices fell to less than $180 USD.
Funny thing is, this value was still about 35% of where the bubble started in the Fall of 2013, a great sign of inherent market value. Things have been on the upswing ever since. That is the first reason for optimism. Everybody who was in it from the beginning, for the long run, were still ahead after all was said and done. The day traders got burned, but I say…..sweet! Who needs more day traders? Hopefully, the STPers, the Short Term Players, have moved on.
Another positive sign up ahead that will be a boon is the halving of Bitcoin production in the Summer of 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, transactions and ownership only showing consistent growth over the last five years, there is no reason to foresee a drop in demand between now and then. Even the most ardent haters and trolls will admit that much after six-plus years of data. Will miners have to sell more BTC to keep the lights on following the reduction of rewards? Yes, and Bitcoin won’t double in price because of the halving like many believe, but the net effect on Bitcoin price values, if this is what floats your boat, is a positive net gain heading into 2017.
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 like Russia working against it seem only strong enough to create black markets locally, and move mainstream adoption to more freedom-based locales. Bitcoin is not designed to be directly assaulted by centralized interests. It is designed to move around their primitive blockades.
Nation-States and Fiat Currencies Worldwide Struggle to Stay Afloat
So the coming future halving of Bitcoin production 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 issues of the rash of failing national fiat currency markets, which is Factor #3. Many financial experts in the West understand that the U.S. Dollar as the global reserve currency is in peril in the not-to-distant future. The fiat economies of the world are falling like dominoes, burning into ashes around Bitcoin’s intrepid strength and resilience in the currency markets. The only question is who’s next to collapse under the weight of their own debt-based system?
The E.U. (The European Union) and it’s Euro has been quite an impressive failure, at least as far as currency value and employment stability in the affiliated countries is concerned. Italy is dealing with unemployment levels for people 15-24 years of age at well over 40%. Greece has seen major economic collapse, forcing a series of handouts. Cyprus was a “beta test” for a future of worldwide “bank bail-ins,” where it is deemed legal by the government to allow bank deposits to be raided by insolvent institutions at a rate of 50% of deposits held. Stealing from the citizenry is done for “The greater good.” If banks collapse, they might have to pay for their incompetence and unethical business practices, and we can’t have that, now can we? The people are starting to catch onto this scam and are taking their economic future into their own hands. The wheels of justice move slowly, but they are moving in Bitcoin’s favor.
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.
The more recent bank run and “recapitalization plan” in Greece didn’t affect Bitcoin value to the same degree, but brought it into the global economic conversation. You know what they say. There’s no such thing as bad publicity. Due to fractional reserve banking, banks don’t hold more than 10% of their asset ledger on hand, so once things turned south, it wasn’t long before the banks were locked down. This beta test was also a success, since they have the consumers’ money under control, and can dole it out at their discretion. Power is nothing without control, and the bankers doubled-down on both. It was a win-win for the banking industry and the people who trusted bankers lost. Again. It was just business. Nothing personal.
People Complain About Bitcoin’s Volatility Upward? Would you like the Opposite?
If these were isolated incidents, a Bitcoin critic could explain them away, but look at the Argentinian Peso (inflation at 30% a month), the Zimbabwe Dollar (inflation into oblivion) or the Russian Ruble (Lost 50% of its value last year.) This is a trend of fiat default, to anyone paying attention. If that isn’t a hint and a half that long-term rule of debt-based fiat currencies are on their last legs, nothing is. As currencies around the world stumble and fall, more and more money flows out of the tried-and-failed fiat system and into “The Future of Money,” as we’ve covered here previously.
The governments and private banking interests they are beholden to are 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. That’s where Bitcoin steps onto the stage, the right asset at the right time in history. Just like the Internet before it, Bitcoin is ready to disrupt and permanently change a financial industry that needs dramatic disruption and change. If logic doesn’t bring a higher level of adoption, the need to protect one’s wealth will.
Money is Flowing into Bitcoin at Record Levels
Finally, all of this record-setting venture capital investment being invested into the Bitcoin and blockchain space is coming out in 2016 and beyond. New technologies, new websites, blockchain apps, and business ventures that will only grow the Bitcoin community from the inside out. Purse.io, OpenBazaar, CryptList.org and many other exciting new business ventures are only going to raise the profile of the Bitcoin community.
There are thousands of developers, designers, and business owners working around the world in new jobs that didn’t exist a year ago, all working to make Bitcoin better every day. We’ve seen this before, twenty years ago, with the market explosion of the Internet. History is repeating itself, as we speak. Many of them have left legacy banking positions to join this economic revolution. The world’s best and brightest minds are getting attracted the Bitcoin like moths to a flame.
Self-defeating government action, financial institutional arrogance, and new Bitcoin businesses opening and innovating worldwide equals potential exponential growth for Bitcoin in the near future. Bitcoin is up almost 100% from its end-of-bubble 2015 low point back in January. Bitcoin again is trending upward heading into 2016. I’ll take the upward volatility of Bitcoin over the depreciating deceit of the current economic masters and their funny money any day. If you have the heart to be a long-term player in Bitcoin, you will reap the rewards. Are you in?