I have given my thoughts on Cryptocurrency on this blog before, but thought it was best to recap my points.
Before we begin, I want to mention that I am about to read this book which has gotten a lot of hype so far and a book many of my readers will be interested in:
Also, let us take a look at some charts. If you have seen my Youtube video, on a potential new bull cycle for Cryptos and Gold, I have spoken about how many of these charts look ready to create a higher low, thereby extending the move by one more wave upwards.
On this blog, I spoke about the bottoming pattern and how we were watching the break of the 4350 zone. We broke and had a run higher and broke above a major flip zone of 5885, a very important zone. My first target was reached at around 8420, and my second target is at the 10,000 level. We have confirmed a new higher low at the 7300 zone after we made this new higher high.
Many of the Bitcoin enthusiasts talk about Bitcoin being a safe haven asset. However, we never really saw Venezuelans or Turks move into Bitcoin when their currency was falling. They ran into the US Dollar. Why not Gold? If you follow my work, I believe Gold goes up when there is a confidence crisis in banks, government, and money…throughout history, this coincides with large inflation…which can also be seen with a psychological lens (confidence in the currency).
Bitcoin enthusiasts do not want to talk about 90% of Bitcoin trades taking place in China. Cryptos was the way retail traders in China could trade financial markets without needing government permission. This is what really caused cryptos to rise to 20,000. When the Chinese government said Bitcoin trading was banned, shortly thereafter, we saw a big fall. Many Chinese retail traders closing their positions. The crypto enthusiasts might hate me for saying this, but all it takes is for a government to ban cryptos, and you will see a large amount of people selling them. Sure, there will be a few hardcore people holding on to their cryptos, but the majority fear government and punishment. They will sell.
Cryptos remain decentralized, which is another positive claimed by the enthusiasts. I believe, Kyle Bass, has come up with the best explanation of this Bitcoin move…and it comes from China.
Communist Chinese Party Members (CCP) and other Chinese elites, have been putting their money into Bitcoin as a way to hedge from Yuan devaluations. Also, the Chinese domestic economy is doing very poorly, and money is fleeing the country. Bitcoin is a way to do this. It is no coincidence that on the days leading up to President Trump announcing large tariffs on Chinese goods on a Friday, is when we saw a pop in Bitcoin leading up to this announcement. Chinese money knew what was coming. They got into Bitcoin before the Yuan devalued.
This is modern China though. The people aren’t allowed to use cryptos, but the elites can.
Now, western retail traders are piling in on these crypto break outs. This means there are interesting charts.
I really like the Stellar and Ripple charts more than other crypto charts, but I do not follow all of them. We may be making a confirmed higher low on both of these charts. Many have already gotten in now, but I must stress, a higher low or any swing is only created when we get the confirmed higher high! If you enter now, you are taking more risk. Once we get the confirmed higher low, the risk drops substantially. Sure you may have missed some of the move, but remember, this is a business of probabilities.
Keep an eye on these charts.
So onto Ripple. Many hate it because it is seen as the establishment coin. The banker coin. Ripple has deals with many and most major banks of western and other major countries. Again, I want to stress it is the xRapid platform that matters, not really the token.
Many believe that Ripple may be the new Global coin. Speaking about Global coins…Facebook announced their own crypto called Globalcoin…which pretty much means that cryptos are leading us down the path that I have warned about.
I believe digital currencies are the future.
When the next financial crisis happens, we will see bank closures. If the government bails banks out, there will still be a large bank run to take out cash. So governments will introduce a new digital currency.
Before we speak about why, let us look at how this may happen.
In 2008, governments bailed out the banks. In this next crisis, banks AND governments will need to be bailed out. Can we do a bail in? Sure, but many people in the west are already broke and taking their money will anger them even more. This is where the Bank of International Settlements (BIS) and the International Monetary Fund (IMF) comes in.
These institutions will bail out governments world wide. They can usher in a digital currency. They may very well use Ripple, since it meets some requirements such as speed, and being able to create as much Ripple tokens as you need. Again, it really is about xRapid. The IMF may already have their own coin, but if not, why build one when there is already one created for you. Heck, they may just rename Ripple the SDR coin.
The IMF will put a value on these new Ripple/SDR coins, say 1000 or 10,000 then send them to banks and governments worldwide. Instant liquidity.
I know that these banks can do this already with a push of the keyboard and create money digitally, but what I am suggesting is that there is a push for central banks, governments, and these banking institutions to go to a digital currency.
Taxation. For many reasons. If governments are broke, they will need to increase taxes more. Where digital money really comes in, is taxing small business’. The employee tax bracket is pretty much taxed up to their eyeballs, and they are getting angry. Small business still have many tax loopholes, which have been closing in the recent years, but these cannot be enforced until we go to a digital currency. Money will be tracked. Small business’ will add a large base of taxation revenue for government, and voters will probably be happy about this. Small business essentially enters the realm of employee income.
Also, other transactions in the private economy will be taxed. Tips from restaurants and from chaffeurs, bag boys etc.
If you sell something on craigslist or ebay, or even do a private job for someone or some tutouring on your free time…all these transactions will be tracked and taxed.
There is a lot of talk on the idea of Modern Monetary Theory and Universal Basic Income. This essentially requires a digital currency. Why? Well the socialist economists understand that the supply of money will be large, and they need to some how control it and control inflation. How do you do this? Through taxation. Essentially the government runs like a central bank, but instead of buying and selling bonds to increase or remove money supply, they take it in through taxation. A digital currency makes all this viable because all this money in the system will need to be tracked.
There are also ideas of implementing other green taxes such as a km driven tax and other such taxes. Where your digital wallet and account will be linked to your vehicle and other appliances, so when you use them, your money will be credited slowly as you use your vehicle etc.
Of course, I worry about the social implications of this. Government will be getting bigger,and they will track everything. They can even shut your access to your money if you are controversial or say things that are seen as fringe, conspiracy theories, hate crime etc. In order for your wallet to be reactivated, you will have to report in person to some government agency for scolding.
Many nations are already playing around with this. China is pretty much, for all intensive purposes, a digital economy. China controls capital flows leaving the country and therefore, the CCP needs to track all money. The Scandinavian countries are also going digital heavy…don’t forget that those nations have some of the highest tax rates and need all money accounted for in order to fund social programs.
So these are my thoughts on why I believe cryptos will lead to our enslavement. There is big talk on who Satoshi Nakamoto is. I believe he/she is already dead, or is likely the government or a bunch of firms/government working together. If we are to wholeheartedly accept Bitcoin, we probably should first find out who created it…and why.
Again, I love the idea of it being decentralized, but I think many people are afraid of their governments, and will accept any rules and laws they pass. Such as: all cryptos are now banned, you can only use the government issued digital currency. If government here decides to ban Bitcoin, I think you will see many people getting out of it, rather than the majority saying ‘screw the government’ and deciding to hold on to their Bitcoin and sticking it to the man.
So this is what I believe is coming. I believe that digital money is coming, and the next financial crisis will lead to it. We are seeing Facebook and other firms pushing this more and more…but I warn, it is required for the new economic system that is coming.