Bitcoin's disappointingly slow growth rates
I spent all of yesterday afternoon and evening listening to bitcoin podcasts on my phone.
One question that came to mind again and again is how are we going to experience hyperbitcoinization if the bitcoin price is manipulated using options and futures by TPTB (The Powers That Be)?
With recent news such as El Salvador recognising bitcoin as legal tender there doesn't seem to be any price action that would match that kind of sentiment.
What seems to be happening is that bitcoin is advancing in spite of bitcoin's price being manipulated.
And this is how I think things are going to proceed in the future.
The bitcoin price will not appreciate by very much each year (at least not at the 200% annual growth rates we have been experiencing) but bitcoin's popularity and use will spread right across the globe.
Prior to December 2017, when bitcoin futures were introduced, bitcoin was appreciating at a steady clip of 200% per annum on average.
However, since December 2017 bitcoin's growth rate has not been anywhere near 200%.
On December 17,2017 bitcoin's price hit $20,000.
Today, three and a half years later, bitcoin's price is at a mere $40,000.
That comes out at 100% appreciation of the bitcoin price in three and a half years.
However, today bitcoin is frequently mentioned in the news and seems to be heading for mainstream adoption, even though it's price has only appreciated by 100% in three and a half years.
Eventually TPTB's conspiracy to stymie and negate bitcoin's growth will end in capitulation and bitcoin's price will skyrocket.
That day is looming and getting closer and closer by the day.
The exact same is true for silver.
How Ethereum's price has been brought under control
Sometimes I worry about bitcoin's future, given the speed with which the altcoins are catching up.
Yesterday I went to coinmarketcap.com and looked up the market capitalizations of the largest cryptocurrencies.
Bitcoin was at $731Bn and Ethereum $285Bn.
That puts Ethereum at almost 40% of bitcoin's market capitalization, somewhere between a third and a half.
A year or two ago, I remember when Litecoin was Bitcoin's closest competitor by market capitalization.
At that time, Litecoin was less than 10% of bitcoin's market capitalization.
But Ethereum has been growing more rapidly than Litecoin and is now almost 40%, approaching one half of bitcoin's market capitalization.
The only reason I can think of to explain why Ethereum is growing so quickly when compared to bitcoin is that to date, there are no futures or options markets in Ethereum.
Actually after doing a quick google search, I see that cmegroup are listing Ethereum futures trading.
Ethereum futures trading went live on the CME on February 8, 2021, just a few months ago now.
This will dramatically slow down growth in Ethereum's price, just like it did with bitcoin's price.
As stated above, bitcoin's price was at $20,000 on December 16, 2017 and today it is only double that, at $40,000.
I expect that something similar will happen to Ethereum's price - the growth will slow down considerably, leaving investors disappointed at their returns when compared to the altcoins out there that do not have futures trading in them.
And this is basically the strategy that TPTB (The Powers That Be) have adopted.
Once the market capitalization of a cryptocurrency reaches a particular level ($250Bn in Ethereum's case) futures trading will be initiated bringing the price under their control.
This is what is going on in gold and silver and in virtually all markets today.
They (TPTB) are trying to maintain their control over the planet and this is how they are doing it.
The trouble with pegging your currency to the US dollar
One other thing that has been on my mind this week is to do with currency pegging.
I noticed some time ago that India and China's currencies are both pegged to the US dollar.
Countries generally peg their currencies to the US dollar because the US Federal Reserve has more gold than all of the other central banks in the world put together.
Pegging a currency to the dollar in theory is to prevent it from losing value and ultimately failing (hyperinflation).
There is a problem with this strategy.
The problem is that when you peg your currency to the US dollar, you not only have to worry about your own domestic inflation and currency devaluing but also inflation in the dollar.
This will become more of an issue in the near future as the US dollar loses its luster and the Federal Reserve prints money at an ever increasing rate to 'maintain stability'. 'Maintain Stability' is a catchphrase for preventing failure and hyperinflation.
Because Russia recently announced that it had sold all of its dollar treasuries and reserves and this will spur on other countries to do the same.
The world has more or less had it with the dollar and America's reckless monetary policy of print, print and print some more.
And as US inflation gets out of hand, that inflation will make its way into the Indian and Chinese economies.
They will not only have to contend with domestic money printing and inflation, but also that of a US kind.
I have said it before and I'll say it again, the only way out, the only lifeboat that is out there, is bitcoin.
If you want to avoid losing everything in the collapse of the US dollar, you better get your assets into bitcoin.