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Last Week In Bitcoin is a series dealing with the events of the previous week that occurred in the Bitcoin industry, covering all important news and analysis.
summary
While bitcoin appears to be aiming for a fall below $ 30,000 soon, the past week has remained relatively calm in the market. The news that the inflation rate in the United States had increased to 5.4%, its highest level since the 2008 financial crisis, was, however, great news; while the UK also saw inflation hit its highest level in three years. The inflation debate has sparked a lot of talk focused on using bitcoin as a hedge against inflation and whether that would lead to the next bull run.
Strong points
Graph of the week
Inflation is yet another way governments around the world are putting the middle finger in the face of the working class. That money you toiled for last year? It’s worth less than before, which means you’ll pay more for goods and services. A dollar today does not have the same purchasing power as it did ten years ago, let alone a century ago, and therefore the financial enslavement of the masses continues as governments continue to print more money.
Next comes bitcoin. Instead of being able to theoretically create more money anywhere and anytime indefinitely, Satoshi Nakamoto decides that there will be a limit to the amount of bitcoin created over time, with an supply capped at 21 million. We all know the story. This in turn meant that many believed that bitcoin would be an ideal hedge against inflation and the devaluation of fiat currencies by the governments that control them.
The chart above shows the value of a single bitcoin over the past 13 years since its introduction and arrival on the market. Notice how the value of a bitcoin stays the same – where its value differs is in the currencies it is supposed to replace, like the US dollar, British pound, euro, and other currencies.
One of the main drawbacks of the entire bitcoin ecosystem today is the global community’s obsession with its fiat currency value and how it is affected by news, influencers and more. . But if you truly believe in bitcoin, you will know that it is destined to replace the fiat system that currently generates a large part of its value and, therefore, its price in fiat is irrelevant.
If you think bitcoin has risen in value over the past decade, imagine what will happen in the decades to come when it becomes the de facto currency of the world.
Bullish news
Besides rising inflation in the US and UK, there has been quite a bit of bullish news. Thanks to trailblazers like Russell Okung, New York Giants running back Saquon Barkley announced last week that he would accept all future bitcoin marketing approvals, which should lead more athletes to follow his traces.
The Grayscale Bitcoin Trust has added BNY Mellon as a service provider in its hopes of launching a bitcoin ETF, it remains to be seen, however, if it will boost market growth as well as in its own products as GBT remains under- evaluated in comparison. to the value of the bitcoin it currently holds.
Then there is the mining news. Compass has partnered with Oklo in order to power their mining rigs, which means bitcoin is going nuclear, so to speak. Additionally, Greenidge will acquire 8,300 bitcoin mining rigs and join Foundry USA’s mining pool, further boosting the growth of the North American bitcoin mining market, as mining companies continue to move into new territories after the China’s crackdown on bitcoin mining has caused a network hash collapse. rate.
Bearish news
While we were hoping Paraguay would follow in El Salvador’s footsteps, the country introduced a bill that would regulate bitcoin and related activities in the country, viewing bitcoin as an asset rather than a currency and imposing strict laws on it. minors. This is both bearish and bullish, as regulatory certainty is usually a good sign and brings clarity.
Other bearish news, which could turn bullish, is the next B Word event on July 21, 2021, starring Jack Dorsey and Elon Musk. The duo will discuss bitcoin and, in particular, bitcoin mining and its effects on the market. It is likely that Musk will continue his anti-bitcoin campaign, despite Dorsey’s likely support for bitcoin and his attempts to prove that bitcoin mining is much greener than Musk would have the world believe. It could go both ways.
Verdict
Overall, I remain optimistic. High inflation rates in different countries are expected to lead to an increase in the price of bitcoin in the near term, coupled with an increase in institutional and individual adoption, the official rollout of bitcoin in El Salvador in September, and the recent drop in the difficulties of mining leading to the detention of minors. on their rewards. Bitcoin is set to have a decent run in the coming months. Of course, the future remains uncertain, especially when it comes to Musk pushing an anti-bitcoin narrative.
If bitcoin does drop below $ 30,000 then this will be an ideal opportunity to accumulate, although the likely bottom remains uncertain. Of course, bitcoin could end up surging suddenly like in the past, perhaps if Musk admits bitcoin mining is greener than he suggests and Tesla would start accepting bitcoin payments again. Otherwise, the unlikely rumors that Apple will invest in bitcoin in the near future could prove to be correct and act as another catalyst for a bull run.
Whatever happens, the fiat value of bitcoin remains relatively unimportant if you understand that it is meant to replace the very currencies in which it is currently valued. Remember that a bitcoin is always equal to a bitcoin.
This is an article invited by Dion Guillaume. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.
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