Inflation and Government Financial Threats Will Fuel the Rise of Bitcoin

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While most articles predict mass adoption of cryptocurrencies by focusing solely on the merits of blockchain technology (which certainly looks promising), this article focuses on the two most immediate real-life events that will push the majority of the world toward lightning-fast adoption of cryptocurrencies, with Bitcoin predicted to be the biggest winner.

Reason #1: Inflation as a result of flawed government response to COVID-19 pandemic

Reason #2: Geopolitics, rise of government tyranny and debanking of dissenters, both domestic and international.

Let’s start with the reason #1. While the current Administration blames inflation on Russia, the truth is inflation in the United States started well before Russia became the 24/7 topic on the news. While the economics of inflation are rather complex, the three main causes of inflation are:

Demand-pull inflation: occurs when there is an increase in the supply of money and credit available for people. This drives the aggregate demand for goods and services in an economy a lot more rapidly than the economy’s capacity to produce. The government’s response to the pandemic caused both the increase of money supply (the government printed 40% of ALL US dollar supply in 2021), and the economy’s reduced capacity to produce (the extended business lockdowns and vaccine mandates decimated the US economy). All of a sudden, the US economy (people) had 40% more cash, to spend on a vastly reduced amount of goods produced. The 7% inflation we are experiencing right now is only the beginning. 

Cost-push inflation: as the demand-pull effect takes place, with more money spent on less goods, the cost of production for most commodities invariably goes up. 

Built-in inflation: describes what happens when people expect inflation rates to continue going up for the foreseeable future. For example, workers demand higher wages to be able to afford those higher prices (this has been happening ubiquitously during the past two years, with multiple states passing high minimum wage laws). This makes inflation a self-fulfilling prophecy. If workers demand higher wages, the cost of production goes up, which means that operators will raise prices for the consumers, in order to maintain their profitability. 

As such, the past two years have created the perfect storm for record-level inflation in the present and the near future. The annual inflation rate in the US accelerated to 7.9% in February of 2022, the highest since January of 1982. 

As consumer inflation and asset inflation is rising to at historic levels, smart money is looking to hedge against this inflation with a liquid asset that has a hard cap on supply, and an independent monetary policy: Bitcoin and possibly other cryptocurrencies.

The other reason why Bitcoin is a very attractive option in 2022, is because Bitcoin is apolitical, and no government, foreign or domestic can confiscate your Bitcoin or shut down your Bitcoin wallet. 

The biggest unreported story of 2022 is the impact Western governments’ actions will have on the US Dollar and the Western banking system in general.

Two events stand out: 

  • Canadian Prime Minister’s Justin Trudeau’s decision to invoke the never-before-used Emergency Act to outright confiscate citizens’ cash and freeze their bank accounts for protesting against his COVID-19 policies. This short-sighted action sent the message to Canadians as well as Americans and others around the world, that the government has the power, authority, and most important, the will to shut down your account and take your money, for simply protesting. This is outright tyranny.
  • The US and Europe-led sanctions against Russia. In another shortsighted move that will have long-lasting effects, the US and EU confiscated Russia’s FX reserves, confiscated Russian citizens’ moneys and assets in the Western hemisphere, and kicked Russia out of the SWIFT banking system. These actions have effectively sent a unified message to the world: The US Dollar is no longer an asset; it is now a liability. It can get confiscated and taken away at will, for going against the will of the US government. 

The largest impact of these sanctions (which still have not stopped Russia’s invasion of Ukraine), is that they undermine the credibility of dollar debt as an international savings device. For decades, the dollar has been considered the safest form of collateral in the world for two reasons. First, because most of countries of the world have to buy US dollars, in order to purchase energy (Petrodollar). Second, because the US dollar has never been used as a weapon.

It might have looked like a smart move to weaponize the US Dollar and the Western banking system against Russia, but with its actions, the Biden administration has officially forced the de-dollarization of the world.

At the international level, other countries are watching with increasing concern how the US, or Europe will confiscate their reserves, default on their debt, and punish their citizens by stealing their monies and assets, if these other countries dare disagree with US or Europe’s foreign policies.

The message was heard around the world: if you ever want to have a dissenting opinion internationally, your country will get punished, and potentially canceled out of the monetary system.

Their solution is understandable: they will de-dollarize their assets and wealth. They will sell their dollar reserves, divest their investments and holdings away from America, from Canada, from Europe. 

In divesting away from the US dollar, other countries and governments have two options: align with a different dominating currency (i.e. China’s Yuan), or decide on an apolitical asset that is out of reach and cannot be controlled by other countries and politicians; something that cannot be taken away by anyone else: Bitcoin.

Efforts of moving away from the US Dollar system and breaking the US Dollar’s dominance in the world are already underway. In a devastating blow, Saudi Arabia indicated they are now considering pricing oil in Chinese Yuan as opposed to US Dollars. This might have barely made the news, but it could be the final deathblow to the Petro Dollar system – the very system that had backed the US Dollar ever since President Nixon took the Dollar off the Gold Standard. This action alone will severely reduce US influence in the world in an unprecedented way, if acted upon, as it is estimated that almost 80% of all global oil sales are priced in dollars.

While choosing a different currency as the dominating trading tool of the world could happen in the short term, the reality is most countries are exploring ways of introducing their own national cryptocurrency (i.e. digital dollar, digital yuan). However, all those national cryptocurrencies are expected to be issued by each country’s central bank, giving their respective governments an even tighter control over their currencies.

While I do not believe Bitcoin will become the world currency anytime soon (if USD falls, it looks like the Yuan will take over), I do believe Bitcoin will become an asset used by most countries and individuals to store their wealth, as opposed to FX accounts, Swiss Bank accounts, and other financial instruments. This makes sense for all the reasons listed above: Bitcoin is apolitical, no one country can control its price, no governments control access to Bitcoin in order to kick others out, and equally as important, it is liquid and has a hard cap on its supply – no one can dilute it.

With individual citizens as well as governments all over the world looking for alternative ways to store their savings and assets, in this new world of financial threats and monetary cancellations, Bitcoin could be the biggest winner, with a large portion of citizens’ and countries financial reserves looking for a safe home.  

However, before the adoption of a cryptocurrency as a potential world reserve currency there are formidable problems that must be overcome and the required change in infrastructure are intimidating. All foreign-exchange marketplaces where the dollar is the world reserve currency would have to be necessarily modernized and supporting a new reserve currency can’t be achieved overnight.

There are also numerous problems and obstacles associated with any cryptocurrency serving as the world reserve currency that would preclude them from being a sovereign, effectual, and universally acknowledged as the unit of exchange. A cryptocurrency system based on blockchain is fundamentally burdened with high-tech problems (i.e.: Ledger size, power consumption, limited supply, computing power, etc.), price volatility and anonymity relating to regulatory issues (banking insurance, taxation, and illegal usage) that must be overcome.

In short despite its advantages, cryptocurrency as the unit of value replacing the U.S. dollar has a hard and long road to travel before its universal acceptance as the worlds reserve currency.

RESOURCES:

Trading Economics – United States Inflation

CoinDesk – Inflation Worries Top Concerns before Fed Meeting

Policy – Saudia Arabia Considers Using the Yuan instead of Dollar for Oil

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Useful Tips on How to Increase Your Profits from Crypto Investment

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Cryptocurrencies have made quite an impact on the financial landscape. Not only has it become very lucrative, but it has also allowed people to settle their debts faster. In fact, cryptocurrencies were able to make plenty of overnight millionaires when the price of Bitcoin suddenly skyrocketed.

While the chances of investors catching lightning in a bottle like that again are slim, you can still profit from it. Here are a few ways you can make the most of your crypto investments and profit from them extensively.

Watch out for FOMO

One of the reasons people fail to make the most of their investments is because of FOMO. FOMO, or the Fear of Missing Out, is a compelling way of motivating people to invest. Since no one wants to miss the next crypto gold rush, they will soon jump in because everyone else is doing it.

Granted, FOMO can be a good motivator at times, as it keeps you on your toes about specific investments. However, if you are looking to throw caution to the wind and trust other investors simply, it will not end well. It is even possible that you might fall for a scam.

Look out for Bitcoin

Bitcoin is the poster child of the crypto market and is easily the biggest platform there. But even if you do not plan on investing in Bitcoin, you should still look out for it. All other cryptocurrencies depend on it, as it can either raise or sink the entire market.

Simply put, if the price of altcoins is rising, chances are that Bitcoin is falling. Therefore, keeping an eye out for it can be essential to making your next move.

Do your research

Possibly one of the most important things to understand about the crypto market is that you cannot trust companies. Since there is close to no regulation throughout the market, scams, and fraud run rampant throughout the market. You might think that you have found the perfect investment opportunity, only to find out that it was a scam.

So instead of believing everything that anyone says about crypto, try to do your own research. Look for the company’s website and try to see if you can find out more about their owners and their history. Most scams and fraudulent companies will avoid trying to give information that can hold them accountable, like the founder’s name.

Be Selective About Your Altcoins

Altcoins are most likely your first investment opportunity in the crypto space. But an important thing to understand about Altcoins is that they are not necessarily long-term investments. These smaller companies can rarely make it past the heavy waves of the industry, as their prices can start plummeting any second.

But if you keep checking their volume, you can find out if it will last long or not. Most altcoins that have a possible future can show a lot of promise through their trading volume. As long as it is high, it can prove to be an incredible investment in the long run.

Avoid Buying Crypto That Is Cheap

Another important thing you should remember about the crypto industry is that it is very volatile. Therefore, there is a high chance you will find different cryptocurrencies that are cheaper compared to others. But just because they’re more affordable than other investments does not necessarily make them better. Furthermore, it does not mean that they may bounce back someday.

In fact, affordability has very little to do with your choice of crypto. Instead, you should try to make a more educated decision about a cryptocurrency by considering its market cap. Simply put, the higher the market cap for a cryptocurrency, the more lucrative it can be in the future.

Learn To Better Manage Your Risk

The cryptomarket is the perfect place to run yourself into the ground trying to take big risks for big profits. However, it is more than possible to play the long run by making smaller but more assured profits.

Whether you are looking to just make more money or settle your debt, you need to learn to manage your risk. It is better to invest in a coin that has minimal but constant growth rather than one that rises and falls constantly.

Diversify Your Investments

You should avoid putting all of your eggs in a single basket, as that is the fastest way to lose your investment. So instead of sinking all of your investment trying to get a single coin of Ethereumm, try something smaller. Buy a few tokens of some smaller altcoins and only buy half or even a quarter of a token of Ether.

Final Thoughts

Chances are that you want to make it big through cryptocurrency. But the unfortunate reality is that cryptocurrency will never be a miracle investment again. So even if you would like to settle your debt faster, this is not the way to go about it.

Instead, you should treat it like every other asset and try to reap profits over a longer period. Because even if throwing caution to the wind could mean you could make it big, it is still risky.

Lyle Solomon is a licensed attorney in California. He has been affiliated with law firms in California, Nevada, and Arizona since 1991. As the principal attorney of Oak View Law Group, he gives advice and writes articles to help people solve their issues, including debt problems.

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Is America Becoming the New Leader in Crypto Currency?

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As China blocked all bitcoin mining and has declared a crackdown on its use, the United States is quite possibly becoming the leader for the future of cryptocurrency. With the recent changes in the global economy, markets are experiencing drastic and sudden change. But this news shouldn’t deter investors from seeking financial freedom here, as our nation is swiftly taking the lead in standing up for cryptocurrency. China has been the leader in the mining of bitcoin specifically, but now that they are deciding to stop its operations in the field many other nations are stepping up to take its place as China leaves itself behind in the market.

As of April of this year, the United States accounts for 17% of all of the world’s bitcoin miners. This is a 151% increase from September of 2020, forecasting that no matter what the markets currently show, bitcoin and other cryptocurrencies are here to stay for the sake of continued financial freedom. Since these numbers do not include the Chinese mass exodus from the marketplace, the numbers could potentially be even much higher than that.

Darin Feinstein, founder of Blockcap and Core Scientific, says, “For the last 18 months, we’ve had a serious growth of mining infrastructure in the U.S. We’ve noticed a massive uptick in mining operations looking to relocate to North America, mostly in the U.S.”

Fred Thiel of Marathon Digital says, “500,000 formerly Chinese miner rigs are looking for homes in the U.S. If they are deployed, it would mean North America would have closer to 40% of global hashrate by the end of 2022.”

The United States has been in the background preparing for such an event as this Chinese exodus to occur. We have been silently building up our infrastructure and hosting capability in expectation that we would see a future where more mining operations would desire to come and operate within our nation. Since the bitcoin fall in late 2017, investors took the risk and have been investing to prepare for the changes to come.

Due to the Covid 19 pandemic and the recent changes with China, bitcoin mining engineer Brandon Arvanaghi said, “People were looking for places to park their cash. The appetite for large-scale investments had never been bigger. A lot of that likely found its way into bitcoin mining operations in places outside of China.”

All of this happening together helped plant the financial seeds for a blossoming future for bitcoin miners, investors and cryptocurrency. We’re still in a transitional phase, where the global market is seeing the effects of China dropping out, but confidence remains high for those who believe in the power and freedom of cryptocurrency. But as said in a previous article I wrote, there is a time to buy and a time to sell. With the market today and with a bit of patience in mind, this could quite possibly be a wonderful time to buy.

As of today, bitcoin prices are below 30,000. Still remember, at the end of last year, bitcoin was still under 25,000. Earlier this year in April before the decision from China to change, bitcoin hit an all-time high of well over 60,000. With prices this low, you may think that the market is crashing or that the idea is falling apart, but you may also be proven entirely wrong by that assessment. Now may actually be another one of the best times to buy into the market with prices so low and the infrastructure established for the United States to continue further growth. China leaving the market may ultimately be wonderful news for those who appreciate and love the power of free market capitalism.

Of course, fear mongering in the marketplace currently continues to spread for the moment. Fox News has been spouting the ‘scary’ news of 100 billion wiped off the crypto market recently. This short-term thinking is miniscule compared to its future potential, and Fox is again playing the heartstrings of the moment for fast clicks of immediate concern. Yahoo! Finance had a recent headline reading, “Crypto Traders Loved Big Leveraged Bets Until Inexplicable Crash”, further touching on those fears. Even one of the co-founders of the cryptocurrency Ethereum has been out in the news speaking of being “done” with cryptocurrency due to his own fears of financial “safety”.

The co-founder, Anthony Di lorio, says, “It’s got a risk profile that I am not too enthused about. I don’t feel necessarily safe in this space. If I was focused on larger problems, I think I’d be safer.”

Playing it safe never wins in the game of life. You’ve got to take calculated risks and make bold investments in time and money to find success in the modern world. For investors, I would say to assess the market and see how China’s decision will not be the end of cryptocurrency. Just as one nation, even if it was the leading mining operation, chooses to leave the market, that does not stop the rest of the world from continuing to pursue those efforts and establishing a better future for the entire cryptocurrency market. From the looks of things now, it seems as if the United States has already taken the proper preparations for an event just like this to occur. Not only that, but we’re far from the only nation to take action in the face of modern events here. Again, instead of being afraid and leaving the market, maybe you should pay attention to the possibility that the future holds and make an investment today while the market is so low. You never know, it may never be this low again.

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A Time to Buy & A Time to Sell: Fearless Investing in Crypto

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When making investments in global markets, there always comes a time to buy and a time to sell. When it comes to cryptocurrencies, this is no different than making investments into any other market on the world stage. Values go up and values go down, and this is just the game we choose to play as investors. Knowledge is power here, and the more you know, the more you have the potential to grow or decline with the times. Playing it safe by merely only working for each dollar you generate will oftentimes not in itself create true wealth. This can also lead to missed opportunities as the market responds and changes to the daily economic occurrences all around us. You must be willing to take risks and be ready with an open mind towards the world of today, not merely just seeking new opportunities for work, but also consistently seeking information on new opportunities to invest. The key here is becoming fearless in your investment, and to become willing to make intelligently informed decisions as to how you move your money around global markets.

When looking at cryptocurrency today, many are making the argument that the good days are over and the chance for economic growth here is in the past. As a prospective investor myself, I am not so sure that is the case today even despite the current news of the moment. Looking through the news of now, you may choose to believe that a crash is about to happen. Headlines across the globe have turned on cryptocurrencies as China itself has made the decision to shut down 90% of its bitcoin mining. This is a crackdown on the financial freedom of the people within China by the Chinese Communist Party. The CCP is mandating that its banks restrict financial services to anyone trying to make an exchange through crypto in efforts to support its own future of a digital yuan. China was formerly an early adopter of bitcoin, but as the people empower themselves on the world stage through the currencies, China has switched its viewpoint to see it as a threat to the CCP’s power structure. While the digital yuan is a centralized, surveilled currency, most of the cryptocurrencies remain free and open on the world stage. This financial freedom is a threat to anyone seeking financial control over their people. The key to understanding here is that, despite China’s own backing out for the moment, this still leaves most of the entirety of the rest of the world stage open with the freedom to still make investment in whatever cryptocurrency that they choose. This decision by China may end up resulting in China being left behind in the marketplace, despite the momentary fears it produces for investors.

Headlines of today continue to read of fear mongering from everything from ‘Dogecoin Falls 70% Since Musk on SNL’ to ‘Bitcoin turns Negative for Year’ experience the ‘Death Cross’. I’ve heard the same rhetoric and phrases being used about the stock market entirely since the ‘crash’ in 2008. But looking at the time since 2008, what else happened? Especially during the times of the Trump presidency, the economy experienced a boom unlike anything ever seen before created by production, confidence and investment. Of course, there will always be fear mongering and there will always be the potential for crashes, but with every crash there also comes again a time to rise. Successful investors with fearless intuition know this. There is no patience for impatience here, and each investor must pay attention to the markets to know when the best times to buy and the best times to sell are.

When the Democratic media and China begin fear mongering, it is a good time for free market capitalists to step up and pay close attention to what is happening on the world stage. The mere idea of them spouting these fears should send off a signal that opportunity is on the horizon.

Remember too, that countries and people around the world are accepting cryptocurrencies into their culture. Most recently, El Salvador has accepted Bitcoin as legal tender. Coinbase, the cryptocurrency exchange, has itself just been accepted onto the stock market exchanges as a company itself. The NRCC, or National Republican Congressional Committee recently declared that it will be directly accepting cryptocurrencies through Bitpay exchanges. The Netherlands, Estonia, Denmark, South Korea, Slovenia and Singapore all are countries that are integrating Bitcoin and other cryptocurrencies into their everyday culture with rapid growth expected. Across the United States and Canada, Bitcoin ATMs can be found and people across the nations are making investments into the virtual currency landscape. Japan was the first country to accept Bitcoin as legal tender and has become a leader in what a nation can look like when adopting crypto into everyday modern culture successfully. All exchanges are being recognized and respected by governments in these areas.

Remember, cryptocurrency is all about financial freedom and independence from centralized banks. Not every cryptocurrency will survive and thrive, but every cryptocurrency still has massive potential for growth here depending on the confidence and investments into which for the days to come ahead. Recently up to and as of today, cryptocurrencies like Bitcoin and Dogecoin have fallen from previous highs earlier this year. As of the writing of this article, Bitcoin is about 34,000 dollars in value. At its highest point this year, Bitcoin was at nearly 64,000 dollars back in April. This may seem like a sharp decline, but it is important to keep in mind that only a few months before that time it was valued around the 20,000 mark. These are individual days in the marketplace, and no decline decides the future potential. Like every other market, prices go up and prices go down. There is a time to sell and a time to buy. Looking at the world stage as a fearless investor, maybe, with all this news of today, it is just the right time to make an investment.

In the words of Ziad K. Abdelnour, “the harder your money works for you, the less you’ll have to work for money”. If the problem here is modern media fear mongering people into being afraid to invest in cryptocurrencies, the solution is for investors who believe in its potential to continue learning and investing, especially as prices fall and new opportunities arise. Fearless investing and having the willpower to jump in and take a risk is the way entrepreneurs become wealth generators in the modern world. Here’s to self-education and self-empowerment with fearlessness in investment as a free market capitalist in the world economy. Cheers to all.

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The Most Common Reason More People Aren’t Buying Crypto

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It’s no secret, if you want to build real wealth, you have to learn how to strategically make your money work for you. Which is why you hear so many wealthy people speak on the importance of investing. However, with investing comes risk and a lot of people are too afraid to step out of their little box and play with the real sharks. So, when an opportunity like crypto currency comes around, you can imagine just how many people are hesitant to invest. They sit around waiting to see the results and envy those that took the initiative to capitalize on the opportunity.

The vast majority aren’t buying into crypto for the same reason more people don’t buy stocks, or put money into an IRA. They’ve been brainwashed into thinking that the best way to grow their funds is to slave at a job and put their money into a savings account. Little do they realize, that’s a much bigger gamble than any form of investment. The slightly smaller majority isn’t buying into crypto because the vox populi hasn’t given it’s seal of approval, In other words, crypto isn’t “cool” yet.

There are many other reasons more people aren’t buying crypto currencies and to be honest, they’re all quite stupid. For instance, some simply don’t understand what crypto currency is. My advice, do your research and educate yourself. Others fall victim to fear, but how can you expect to achieve big results if you’re always playing it safe? A lot of people think that they’re too late to join the party. But trust me, this is only the beginning. And they don’t even get me started in mainstream media manipulation. Learn to separate fact from fiction and make decisions based on your own findings.

While all these reasons contribute to why people shy away from the opportunity to gain real wealth, there’s one reason that makes even experienced investors miss out.

Thinking that crypto is a bubble.

Here’s the reality of things, everything is a bubble, it’s just cyclical. That goes for investing in stocks. That goes for starting a business. That goes for real estate. It can even apply to employment. Literally, EVERYTHING. So, why would you let that stop you?

What happens when the housing market crashes? It creeps back up, and then crashes again and so on. People always try to make a comparison between crypto currency and the Dot Com bubble. But look at the facts, most websites haven’t gone anywhere since that bubble burst. In fact, websites and virtual presence are now essential to building your business. This will almost surely be the case for crypto. Cash is losing value faster than ever and will eventually be replaced. Now is the time to jump in and place your bet.

If Crypto currencies were a company, it would be like Facebook. It’s still in its early phases where only college students are using it and your parents aren’t going to have FB pages for at least another 6 years.

There’s inherent risk in everything: from crossing the street to making an investment. The people who are investing in crypto currency right now are the early adopters, the risk takers, and the true believers.

I’m not saying everyone should buy into BTC, but if you want to be a big shark, you can’t stay in the small pond forever. But I get it, not everyone wants to play big and not everyone can stand the fire. It wouldn’t surprise me if the average person goes into crypto investing during its meteoric rise and invests at the end of an uptrend- then watch it crash. They’ll pull out their money at the first sight of a huge loss and swear off crypto, while telling everyone who will listen that it’s a scam.

Crypto investing may not be for everyone, but if you’re willing to educate yourself about the market, develop a trading strategy, and stick by your plan- crypto investing will be a valuable financial tool. Especially if you’re someone who isn’t happy with the fact that the world is run by manipulating financial institutions. This is your opportunity to take back control.

So, don’t be foolish and fall into the stupidity trap set to have you live a life of mediocrity and fear. Educate yourself, strategize and go for the risk.

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