Another Bitcoin Crash

Imagine waking up to another Bitcoin crash! Scary right? If you were heavily invested into crypto and all of a sudden, the last year’s spike lost momentum, then all hell would break loose, right? Your money would be eaten up and someone would be to blame.

12 months of Bitcoin trading between 80k to 120k.

When you think about it does it affect your day to day? What I’m saying is real money fluctuates based on market conditions, inflation, and belief of what the majority of people believe. In other words, in retrospect to what Bitcoin does and other cryptocurrencies offer apart from investment and the hope that market value will increase.

El Salvador has reversed its historic decision to make Bitcoin legal tender, following pressure from the International Monetary Fund (IMF). The law, enacted in 2021, required all businesses to accept Bitcoin alongside the US dollar, but many merchants struggled to adopt it.

It is a fact that Fiat money is a government-issued currency that is not backed by a commodity such as gold. Fiat money gives central banks greater control over the economy because they can control how much money is printed. Most modern paper currencies, such as the U.S. dollar, are fiat currencies.

However, Bitcoin was invented as a platform to make digital transactions. There is a limit of some twenty-one million Bitcoins in circulation and that is what makes the value per token (Bitcoin) attractive and increase in value subject to demand and offer. However, many people have rejected the acceptance of crypto in general.

It is very difficult to imagine bitcoin or other cryptocurrencies becoming mainstream and fazing out Fiat money. Oh, and by the way we are not talking about Italian cars. If we were then I’d rather have an Alfa Romeo or Farrari. The bottom line is crypto is unstable, and therefore as we have seen in the past it has crashed more than once.

To be fair speculation is the main pendulum for growth based on promoters who convince others to follow suit. These promotors are the investors who realize in order to increase the value of their investment they need to create a bull market. You only have to look at Trump and everyone invested is excited because his swagger has bolstered potential gains.

The only problem with that is it might not last. In his first term in office, he spoke big about how he was going to make America great again, and look what happened, old boy Biden took him out. Now he’s back and got his offspring to create their own crypto funds and again people are rushing onboard from speculation, but the likelihood of ever making these cryptos successful is another story.

Yes, there is space for Bitcoin and the other cryptocurrencies, but to what avail. A digital token worth real money facilitates moving so called money around the market at the press of a key, but don’t kid yourself; the likelihood of total dominance is something for years ahead.

All the best,

Prof. Carl Boniface

https://www.youtube.com/watch?v=-SdpOESEcM8

Vocabulary builder:

Crypto (n) = cryptocurrency is a digital currency, which is an alternative form of payment created using encryption algorithms. It's a token that represents real money.

Fiat money is a type of government-issued currency, authorized by government regulation to be legal tender. It's a real form of money accepted worldwide.