Bitcoin – The Four Pillars of the Next Bull Run
Four factors indicate that Bitcoin is on the rise again, and these give us great optimism for the upcoming months.
The biggest investment fund in the world is sustaining the positive outlook. In seven of the last ten years, bitcoin has beaten all major asset classes, according to its most recent analysis, "Bitcoin: A unique diversifier." The annualised return on it is 100%.
Additionally, the 2024 "Halving" vintage is promising following a very successful 2023 (+147%) vintage. Since January 1, the value of Bitcoin has increased by 56%.
According to the analysis, bitcoin offers protection against volatile global situations. This makes sense in the current situation.
BlackRock thinks that "bitcoin, the first finite, decentralised, stateless monetary alternative to be widely adopted globally, has no counterparty risk, is not dependent on any centralised system, and is not dependent on the fate of any particular country."
The fund associates the adoption trajectory of bitcoin with escalating apprehensions regarding worldwide monetary instability and geopolitical disputes. One important component of the equation will be US monetary hegemony:
"Growing concerns in the United States and abroad about the state of deficits and public debt have increased the appeal of alternative reserve assets as a potential hedge against potential dollar setbacks."
The fund thinks that bitcoin is "an emerging technology that is in its early stages and could become an international payment currency and store of value."
November's US presidential election may serve as yet another encouraging trigger. "Bitcoin at $200,000 by the end of next year, regardless of who is in the White House next," according to Standard Chartered analyst Geoff Kendrick:
Like Saylor, Mr. Kendrick believes that the entry of American banks will mark a sea change. He believes that following a comparatively calm summer, ETFs will once more draw significant investments.
For him, the most optimistic outcome would be a Trump victory. In fact, let's not forget that the Republican contender pledged to establish a tactical stockpile of bitcoins during the Nashville Bitcoin Conference.
Indeed, he essentially pledged to hang onto the 200,000 Bitcoin that the US government now possesses. But he also made a suggestion that the US Treasury may purchase more. A measure to purchase one million bitcoins has been proposed by Senator Cynthia Lummis.
Neither Cynthia Lummis's ability to persuade the US Congress nor Donald Trump's victory in November are assured. But still, look how far we've come...
"If bitcoin becomes an international reserve currency and is integrated into the monetary system, one bitcoin will be worth millions," said the CEO of Vaneck. As soon as it approaches half the capitalisation of gold, it will rise beyond $350,000.
Additionally, according to Vaneck experts, a win by Democrat Kamala Harris would eventually be good for bitcoin because of her more inflationary policies. According to them, both presidential contenders will probably continue to have significant budget deficits, which may trigger additional quantitative easing (QE).
Nothing about this system is good or harmful. It's just a matter of the economy having to grow in size in order for salaries to rise and living standards to rise. In other words, substance must be transformed and transported to supermarkets using energy.
Regretfully, the availability of inexpensive fossil fuel resources is running out, which makes it harder to achieve the productivity and growth required to increase salaries.
What took place in 2007? the top of conventional oil, or the cheap oil that can be extracted from the earth. The European Union used 17% less energy in 2023 than it did in 2006. Thus, the old continent is beginning to feel the effects of inflation.
The past two years' double-digit inflation serves as a lesson not to leave your savings in the bank. A far better store of value is Bitcoin, which is a finite supply of money.