After years of trying to fight Bitcoin (BTC), many of its historical opponents eventually changed their minds drastically during the year 2020. Everyone understands what Bitcoin’s greatest value proposition is today. ‘hui: Bitcoin allows you to protect your wealth over time in a censorship-resistant way. Everyone is now wondering who will be the next big players to enter the world of Bitcoin in the months to come.
Bitcoin is at a major turning point in its history. This year 2020 was marked by a coronavirus pandemic which will be recalled in a few years as the tipping point for Bitcoin.
If you are not familiar with this concept of “tipping point”, or tipping point for those who are allergic to the language of Shakespeare, it was popularized by Malcolm Gladwell in his book “The Tipping Point: How to Make a Difference With Very Small Things”Appeared in the early 2000s.
In his book, Malcolm Gladwell explains that once this tipping point is reached, everything becomes different afterwards. This coronavirus pandemic was a major event that sparked an economic crisis of greater magnitude for decades.
Central banks and governments still apply the same ineffective policies
The responses of central banks and governments have been those employed consistently since the establishment of the current monetary and financial system in August 1971:
- Lowering interest rates to zero.
- Printing fiat money.
- Increase in public debt to finance stimulus plans to support the economy.
The problem is that, crisis after crisis, the magnitude of the measures to be implemented continues to increase. If billions of dollars were enough in the early 2000s, tens of billions of dollars were needed in 2008. And in 2020, we’re talking trillions of dollars.
The central banks of the major economic powers have printed more than 12,000 billion dollars since March 2020. Global debt exploded to $ 277 trillion.
As the world’s leading economic power, the United States is obviously at the top of this ranking with a public debt that now exceeds $ 27.300 billion. The public debt to GDP ratio reaches a record level in the United States:
Globally, the norm is now to have a public debt-to-GDP ratio well above 100, or even 110%, in most of the world’s major economic powers.
The current situation is not sustainable, and a Bretton Woods 2.0 will not be enough
The current economic situation is clearly not sustainable over time. For many, the seven deadly sins of the current monetary and financial system will sooner or later bring its downfall.
Well aware of this, many economists and politicians are now calling for a Great Reset of the current system. A kind of Bretton Woods 2.0 in order to put the world back on the right track by taking into account the new challenges of the 21st century.
What these economists do not understand is that the great monetary inflation that we are experiencing now cannot be stopped as long as central banks have such unlimited power in money creation.
From the 80s, Friedrich Hayek called for removing control of money from state hands :
“I believe that we will never have good change again before remove the currency of hands of governments. ”
Friedrich Hayek has spent his life alerting people to the dangers of the current system
He has always been very critical of this system. For Friedrich Hayek, it was essential to have a competitive currency beyond the control of states. This would be the best protection against the risks of inflation.
For Friedrich Hayek, it was obvious that the inflation decided by governments has always been carried out solely for the benefit of the governments themselves:
“I don’t think it is too much to say that much of history is a story of inflation, usually inflation designed by governments for the benefit of governments.”
Today, many people think that money should absolutely be a prerogative of states. In his book “The denationalization of currency”Published in 1976, Friedrich Hayek pleads for a money market outside the monopoly of states.
He said it is essential to move away from the dogma that money should be the responsibility of states.
Friedrich Hayek believed that money should not be the prerogative of states
This conception, which seems obvious to us today, is very recent. In the Middle Ages and until recently in history, royal power control was limited to certifying that a gold coin was equal to one gram of gold.
Kings did not have the power to influence the money supply in circulation as central banks do today.
Friedrich Hayek, who died in 1992, must turn in his grave after seeing central banks print more than 12,000 billion dollars since March 2020. Friedrich Hayek was already preoccupied with all this in the mid-1970s.
For him, the main culprit was the English economist Keynes. He was guilty of pushing strongly for the idea of government and central bank control of currencies.
To stop this inflationary spiral, Friedrich Hayek saw two possibilities:
- A return to the gold standard, which allows the scarcity of the precious metal to limit thoughtless money creation.
- Or competition between currencies.
Bitcoin is the solution Friedrich Hayek dreamed of. The emergence of Bitcoin is therefore the realization of Friedrich Hayek’s dream. Hayek’s vision is therefore gradually taking precedence over that of Keynes, which has been dominant since the middle of the 20th century.
Mentalities are changing, and Bitcoin becomes the number one option in the face of the Great Monetary Inflation
In 2020, institutional investors understood that Bitcoin was the best possible weapon in the face of the great monetary inflation that we are experiencing. Paul Tudor Jones started a movement in May 2020 that has grown steadily since.
Grayscale Investments’ Bitcoin fund now holds more than 546,000 BTC for its customers who are more than 90% institutional investors. Big companies are using Bitcoin as their reserve asset. The movement was initiated by MicroStrategy and its CEO Michael J. Saylor at the beginning of August 2020.
A major player in the Bitcoin world with its ultra popular CashApp which facilitates the purchase of Bitcoin, Square then joined this movement at the beginning of October 2020.
At the end of October 2020, it was PayPal’s turn to announce its upcoming entry into the world of Bitcoin. By early 2021 at the latest, PayPal will allow its 346 million users worldwide to buy / sell Bitcoin directly from its platform.
Better yet, PayPal will offer Bitcoin payments to the 26 million businesses on its network. However, this raises questions in terms of self-sovereignty, as shown in a first case that caused a lot of noise about a user account that was banned by PayPal for too many cryptocurrency transactions.
On Wall Street, there are only Ray Dalio or Warren Buffett left to still doubt Bitcoin
More and more legendary Wall Street investors are dubbing Bitcoin, saying it is a once-in-a-lifetime opportunity. Bitcoin is indeed the opportunity of a lifetime. In the end, only Ray Dalio and Warren Buffett are left to fiercely oppose Bitcoin.
Ray Dalio still thinks, mistakenly, that Bitcoin will be stopped by governments if it grows too big. Ray Dalio is totally wrong. Bitcoin can no longer be stopped, and above all, the tendency is rather to take better account of Bitcoin via more favorable regulations.
At the very least, this is the hope that arose with the election of Joe Biden as the 46th President of the United States.
Warren Buffett still thinks Bitcoin is a “squared poison rat”, but after all, at his age, it seems logical that he wouldn’t be able to question himself as to why Bitcoin is revolutionary. So I find it hard to imagine that Warren Buffett will be among the next to enter the world of Bitcoin.
If Warren Buffett will not be among those who will enter the world of Bitcoin in the coming months, the big question is who will be next.
PayPal’s Entry into Bitcoin Brings Credibility to the General Public
The entry of PayPal is important because it brings enormous credibility to Bitcoin. PayPal is a major and highly respected player in the online payment world. Those who were still hesitant to take the plunge due to Bitcoin’s bad image will probably be reassured.
During the summer of 2020, the Office of the Comptroller of the Currency (OCC), which is the US banking regulator, has given US banks the green light to buy and hold Bitcoin for their customers.
So it’s easy to imagine that American banks will be the next to offer Bitcoin buy / hold services to their customers. If this is not a good thing from the point of view of the Bitcoin revolution, since banks are part of the problem that Bitcoin wants to solve, it is something that will greatly boost the adoption of Bitcoin by the general public.
US banks to follow PayPal’s path in the coming months
Jamie Dimon, who said in May 2020 regretting calling Bitcoin a fraud at the end of 2017, explains that he sees Bitcoin taking hold. However, he says it’s not his thing. He pushes JPMorgan to enter the world of Bitcoin to take advantage of it.
Since May 2020, JPMorgan offers for example its banking services to Coinbase or Gemini.
In 2021, I imagine JPMorgan will eventually offer Bitcoin to its customers. In the wake of JPMorgan, other American banks will follow, such as Morgan Stanley and Citibank. Citibank has just published a report in which its analysts see Bitcoin capable of fetching above $ 318K by the end of 2021.
This is even more optimistic than my forecast of a Bitcoin at $ 100K at the end of 2021. But why not …
Apart from American banks, what other players could enter the world of Bitcoin in 2021?
GAFA, Amazon and Apple in the lead, will eventually enter the world of Bitcoin
I immediately think of Amazon, which could enter the world of Bitcoin by accepting Bitcoin as a means of payment on its site. It would be something that would boost the credibility of Bitcoin, but also its use..
Besides Amazon, Apple would have a double interest in entering the Bitcoin world quickly. The first would be to use part of his cash reserve of $ 192 billion to buy Bitcoin. This movement could then be followed by many other major companies in the United States. They are sitting on mountains of cash that are suffering the effects of this great monetary inflation.
But Apple could also generate a lot of money if the company integrated Bitcoin into increasingly popular Apple Pay. Apple could build a secure crypto wallet directly within its iPhones.
While this might seem utopian just a few months ago, the probability that these players will arrive in the world of Bitcoin in the months and years to come continues to grow.
Bitcoin is a real revolution that is set to last. Faced with such a monetary revolution, there is only one choice: embrace it as soon as possible to derive the greatest benefit from it. GAFAMs will be no exception, and they will eventually have to embrace Bitcoin sooner or later..
It will be a matter of survival for them too.
I haven’t even mentioned here the governments that are increasingly investing in Bitcoin in order to break free from the American yoke on the world. I am thinking here of Iran or Venezuela who see Bitcoin as a way to break free from American sanctions.
Either way, the future looks bright for Bitcoin, and the best is yet to come. Don’t be surprised by the big announcements for Bitcoin that will multiply in the months and years to come. This is only the beginning as more and more big names will eventually enter the world of Bitcoin.
A developer by training, I discovered Bitcoin in 2014 but did not immediately grasp the importance it could have for the world of tomorrow. I took a more in-depth look at it from the start of 2017 and I haven’t let go of it since.
Passionate about Bitcoin and the new system it is trying to build for the future, I decided to participate in its evangelization at my modest level by writing about Bitcoin, Blockchain and cryptocurrencies in different media.
It is with pleasure that I publish some of my texts in French on The Coin Tribune.
I also write quite a bit about personal development and self-improvement.
Please feel free to connect with me via social media or in comments on my articles if you have any questions regarding my articles.