Bitcoin Skeptic Turns Bullish: “There Will Be Another Bull Market, Much Larger Than The First One”
As Bitcoin continues to grow after the price climbed to its all-time high (ATH) at $20,000, that made it the center of the world’s interest, and then losing 84% its value, skeptics have started to turn into believers.
One such change of heart and mind is seen in Jared Dillina, editor and publisher of The Daily Dirtnap and investment strategist at Mauldin Economics shared “Confessions of a Reformed Crypto Doubter,” on Bloomberg.
In early 2018, Bitcoin, he says was the subject of “much derision” as it has all the signs of a bubble
“complete with shady promoters, a speculative frenzy and investors with precious little knowledge piling into the market.”
At that time, he was a vocal bear but no longer, and the reason is,
“There has never been a greater need for a stateless currency and store of value held outside the financial system.”
The Problem with the Fiat system
The issue he shared is that the “philosophical basis for fiat currencies has never been more fragile” and no politician in the US is talking about shrinking the “very large budget deficits.” The dollar has lost 96% of its value since the Fed was created in 1913.
This Modern Monetary Theory or “printing of as much cash as a government needs to fund its spending” is setting Bitcoin apart from govt. issued currencies.
Bitcoin, however, behaves more like an asset than a currency, that too not a terrific one as it is prone to get vaporized fairly frequently, which he said could just be a “feature, not a bug.”
Unlike fiat money, the author shares Bitcoin is mined, but “there is not much mining left to do.” Though gold can’t be printed either, more could be discovered, he said.
Moreover, student loan forgiveness, medical debt forgiveness, medicare for all, a wealth tax have become the talk of the early 2020 presidential campaign. But even this would require bond issuance, that he says might not be easily absorbed by the capital markets.
With interest rates going down and debt outstanding tripled,
“Direct financing by the central bank is probably the only way to accomplish these goals.”
Bitcoin will Rise Significantly
This is why the Bitcoin skeptic has turned a supporter and like it better than gold, though he own both.
“No government can ban Bitcoin or seize it. It is technologically impossible, without a piece of technology known as a quantum computer. It is the ideal way to move capital seamlessly and secretly around the globe at minimal cost.”
Even if 0.5% of the population adopts Bitcoin, with just 16 to 17 million BTC available,
“the price of Bitcoin will rise significantly.”
Comparing it to the Internet, he says how while 99% of the Dot-com stocks disappeared, a handful went to $1 trillion market caps, and this pattern will be repeated with Bitcoin and blockchain.
This is why he believes
“there will be another bull market, much larger than the first one where the potential is finally realized. Bitcoin is currently in a state of neglect. I don’t think we’ll have to wait 20 years for the second act.”