Bitcoin wiped out its rally of yesterday and fell under $38,000 at time of going to press. Meanwhile, the DXY, the US Dollar Currency Index, continued its steep climb as investors choose the perceived safe option, at least for the short term.
Bitcoin, and the altcoins are coming dangerously close to what could be a precipitous crash, as world markets tumble due to rising inflation, the war in Ukraine, and supply lines that are close to breaking, among many other financial issues.
It might be argued that Bitcoin is still too young and too volatile to yet become the inflation hedge that it is supposed to be. The market is still pricing it as a risk-on asset and correlation with tech stocks is remarkably tight.
By the end of play tonight, tomorrow, or by the end of the week, bitcoin could well take that plunge that takes it down to around $30,000. Taking hold below $29,000 could see it drop another $10k to the highs of the 2017 bull run, at $20,000.
For many, especially those investors new to the crypto market, this is an armageddon type scenario that would probably drive them away from crypto forever.
However, the institutions and those in the know will be waiting for that possibility with eager anticipation. Bitcoin at such a price would be like manna from heaven, and some serious buying could be expected.
It may well be successfully argued that we are in an upside-down period for what is truly valuable in the world’s finances. The DXY is soaring, only $1.50 from a local high set back in January of 2017.
Nevertheless, gravity must tell in the end, and the dollar absolutely must begin a rapid fall against gold and the other sound money which is bitcoin.
Gold is a store of value that has persisted through the centuries, just as all the fiat currencies that were ever launched have eventually gone to zero.
Bitcoin is an even scarcer store of value, and arguably has much more utility than gold. It can only be a matter of time before rising inflation, and the decreasing purchasing power of fiat currencies, send entire populations into the safety of bitcoin. It cannot be long now.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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