Since reaching $ 3,800 in mid-March 2020, Bitcoin has experienced a dramatic recovery to the point that it is now the best performing asset of 2020, far ahead of gold and the financial markets. All of this is just the beginning, and I can see 5 big push factors that will make Bitcoin see its price well above $ 10,000 very soon.
Things are going as planned for Bitcoin
The moment long awaited by all Bitcoiners is finally near. When you read these lines, we will be less than 500 blocks from the third Halving Bitcoin. This automatic event occurs every 210,000 blocks of mined transactions.
Given the average production of a block every 10 minutes on the Bitcoin Blockchain, a Halving therefore generally takes place every 4 years. As I read on Twitter, Halving can be compared to the Bitcoin Olympics.
The Halving acts as a marketing campaign phenomenal for Bitcoin being one of the essential factors in the rise in its price, due to the greater scarcity of Bitcoin supply that this induces.
An increasingly strong craze is thus emerging around this event, which is essential to the monetary policy of Bitcoin, as shown by the explosion of search volumes for the term “Bitcoin Halving” on Google.
All this has a strong impact on the price of Bitcoin which is approaching more and more the psychological threshold of $ 10,000. As of this writing, the price of Bitcoin is $ 9,936. When you read this story, the price of Bitcoin may already be above $ 10K in direction for the next resistance of $ 10,500.
Since his Black Thursday in March 2020, the price of Bitcoin has thus increased by + 162%. Bitcoin is by far the best performing asset of 2020 with a performance of + 38%, while gold presents “only” + 12%, and that Wall Street is still in negative.
The Halving is not solely responsible for this increase in the price of Bitcoin, and in what follows, I will present the 5 other factors that push the price of Bitcoin to rise beyond the $ 10,000.
1. Bitcoin’s third Halving
Expected for months, the third Bitcoin Halving will occur in less than 500 blocks now. At the current production rate of new blocks on the Bitcoin network, this Halving should take place on May 11, 2020 at the end of the day.
This third Halving serves as a catalyst to draw media attention to Bitcoin.
The first evidence of this is the explosion in search volumes on Google for the term “Bitcoin Halving”. Then, we see that more and more traditional finance sites are giving wide articles on Bitcoin and its Halving.
All this attention around Bitcoin at this precise moment makes it possible to highlight the single monetary policy of Bitcoin. This is a key advantage as central banks such as the Fed pursue quantitative easing monetary policies that blow up their Balance Sheet.
Many people are discovering that another way than that of quantitative easing is possible. It’s about quantitative hardening whose Bitcoin highlights the virtues.
Lest they miss the Bitcoin revolution, many people say they buy their first Bitcoins in order to have them just as they like to remind them.
This “just in case” clearly means that even if they are not convinced that the price of Bitcoin may reach a million dollars in the future, they do not want to have eternal regrets.
It’s also a great way to enter the world of Bitcoin. Take action by buying a small amount of Bitcoin will save you significant time on your learning.
One of the biggest factors behind this is the acceleration of things in the Bitcoin world. We just have to hope that they will then make the effort to continue their learning of what Bitcoin really is, and why it represents the future.
2. Loss of confidence in the fiat system
Whether you are a Bitcoiner or not, you will readily admit that there is an increasing loss of confidence in the current monetary and financial system.
Decisions made by the Fed and other central banks since the start of this coronavirus crisis have caused a stir for many that fiat money no longer had any real value.
This sentiment is explained by the ease and speed with which the Fed has already been able to print several trillion dollars.
The circulating money supply of the United States dollar increased by more than $ 2 trillion in a few weeks:
This policyeasy money will cause currency devaluation unprecedented in the coming weeks and months.
People with a majority of cash will be the most impacted. You know just like me that it is primarily poor people who are in this situation. The Fed’s decisions will therefore make those most in need of assistance even poorer.
Here we find the principles of Cantillon effect in action. Bitcoin is an ideal antidote to break the cycle of poverty in which the Cantillon Effect involves you.
All this money printed by the Fed ends up being directly injected into the fiat system, as the explosion in the Fed’s Balance Sheet shows:
With over 6.700 billions of dollars in assets in its possession, the Fed has just become the world’s largest asset manager in front of the giant BlackRock.
This Fed policy artificially inflates the financial markets. A real disconnect has been created between Wall Street and the real economy.
The number of unemployed in the United States has just exceeded the threshold of 20% when he was just 3.5% at the end of February 2020.
In parallel to this, the American public debt has just exceeded 25 trillion dollars. This represents the incredible figure of + 115% relative to the GDP of the United States.
The recovery plan of 2 trillion dollars decided by the government and the American Congress, as well as the many requests for bailouts to which the federal government responded favorably are the cause.
All this places an incredible burden on future generations and calls into question the confidence of millions of people in the fiat system.
The proof of this total loss of confidence in the American dollar is found in the decision of a significant number of Americans to use their $ 1,200 stimulus check to buy Bitcoin.
The new wave of stimulus checks which is arriving should also see other American citizens performing the same operation. From my point of view, those who exchange their check for $ 1,200 against Bitcoin will be considered real geniuses in a few years.
Their attitude, which reflects the loss of confidence in the U.S. dollar, is one of the factors that is driving the price of Bitcoin higher today.
If you doubt it, know that a certain Joe was able to buy 0.175 BTC on April 21, 2020 with his stimulus check. Today, this represents more than $ 1,750. This is by far the best investment Joe has ever made in his life.
3. Negative interest rates
The European Central Bank has been offering negative interest rates for several years now. By lowering its interest rates by 150 basis points twice in March 2020, the Fed reached zero interest rates.
Many voices, including that of US President Donald Trump, call for a shift in Fed interest rates to negative territory.
For the time being, Jerome Powell resists, but there is nothing to say that he will not give in to pressure on this point. Holding 10-year US Treasuries has now become something that costs you money as shown in the graph below:
Adjusted for inflation, the rate for 10-year US Treasury bonds, which are still highly sought after, is negative at -0.38% currently.
Investors therefore choose to abandon it by looking for more profitable assets. Gold benefits as we have seen with an increase in + 12% since the beginning of the year.
Considered by more and more traditional investors like digital gold, Bitcoin is proving to be a better store of value than gold in times of crisis.
Since the beginning of the year, the price of Bitcoin has increased by + 38%.
More and more investors are coming to buy Bitcoin, and this movement will increase in the coming months given the great recession that the world is going to experience.
The need to find riskier investments with better returns is therefore one of the factors driving the price of Bitcoin up.
Coupled with the historic supply shock Bitcoin will experience after its third Halving has passed, this growing demand will be at the center of a very strong bull market in the Bitcoin world over the next 18 to 24 months.
4. The arrival of big investors from the world of finance on Bitcoin
The news had the effect of a small bomb in the world of Bitcoin and that of traditional finance. On May 7, 2020, the hedge fund manager Paul Tudor Jones sent a letter to the investors in his fund, including the following:
“We are witnessing the Great Monetary Inflation – an unprecedented expansion of all forms of money, as never before in the developed world. The best profit maximization strategy is to own the fastest horse. If I have to forecast, I bet it will be Bitcoin. “
Paul Tudor Jones
Paul Tudor Jones explains that given the high monetary inflation we are witnessing, the best strategy to protect ourselves is to bet on “the fastest horse”.
Currently, Paul Tudor Jones considers Bitcoin to be the famous “fastest horse”.
He therefore decided to hedge against the risk of currency devaluation by taking a position on Bitcoin with his hedge fund which manages nearly $ 40 billion assets.
This position on Bitcoin was not made through a direct purchase, but by buying derivatives on the Bitcoin futures markets.
That doesn’t make a big difference to the case, as seeing Paul Tudor Jones entering the Bitcoin market even indirectly is an important indicator of an upcoming Bitcoin price hike. Many other large hedge fund managers will follow the trend in the coming weeks which will reinforce the other factors favoring the rise in the price of Bitcoin.
More interestingly, in his letter, Paul Tudor Jones makes it clear that he acts simply by pragmatism when he has never been a fan of cryptocurrencies until now:
“I’m not a hard money madman or a cryptocurrency madman. The most compelling argument in favor of owning Bitcoin is the digitalization of currency that is shaping up everywhere, accelerated by the Covid-19. “
Paul Tudor Jones
Whether you are a Bitcoin fan or not, you too will soon realize that Bitcoin is the future.
Bitcoin’s total paradigm shift will dictate whether you choose to support it or not.
Paul Tudor Jones understood this, and that is why he chose to position himself by specifying that “Bitcoin reminds me of gold when I entered the business in 1976”.
5. Optimism is back in the Bitcoin world
All the positive narrative around Bitcoin for several days is changing the overall feeling in the world of Bitcoin. While we had reached an extreme fear during the month of March 2020 following the Black Thursday of Bitcoin, the feeling returned to optimism again:
Optimism is still being measured, but the trend is clearly positive.
More and more people will be greedy now, which will increase Bitcoin buying decisions. As soon as Bitcoin has exceeded $ 10,000, a virtuous circle will settle which will push its price much higher.
When you read this article, the price of Bitcoin may well have already gone above $ 10,000. Less than 500 blocks from Bitcoin’s third Halving, it’s something extremely positive that’s just a taste of what we’ll be experiencing in the months to come.
Seeing Bitcoin break records day after day will most likely become a habit in the next 18 to 24 months. So you have to get used to this, and above all, be forward-looking by continuing to accumulate Bitcoin so as not to have eternal regrets in the future.
Developer by training, I discovered Bitcoin in 2014 but I did not immediately understand the importance it could have for the world of tomorrow. I got into it more deeply from the start of 2017 and since then I haven’t given up on the business.
Passionate about Bitcoin and the new system it is trying to build for the future, I decided to participate in its evangelism at my modest level by writing on Bitcoin, Blockchain and crypto currencies on different supports.
It is with pleasure that I publish some of my texts in French on The Coin Tribune.
I also write a lot about personal development and self-improvement.
Do not hesitate to exchange with me via social networks or in comments on my articles if you have questions about my articles.