Bitcoin's Biggest Story
View of Europe over model globe

Bitcoin's Biggest Story

By Final Sigma | Final Sigma Finance | 24 Dec 2020


I'll admit. I was a little disappointed that I never got a response to this tweet, but it's still a question that hasn't let me go.

Just yesterday, George Gammon put out this (22-minute) video explaining the circumstances that would lead to a US Dollar collapse:

In sum, all fiat currency represents debt, and the demand for dollars is driven by foreign nations' needing it to settle international transactions. We would be able to spot a dollar collapse when dollar-denominated debt began to shrink and debt that is denominated in a competing fiat currency began to grow.

Yet, there's one currency missing from his list: Bitcoin.

Just today, Bitcoin was used to move $284m+ in value from one party to another. The transaction was completed in minutes, and it cost a transaction fee of ~$354.

Bitcoin's adoption began with private individuals, as hobbyists and early tech entrepreneurs grew the network into its initial userbase. Then we saw more retail investors come on board in 2016 - 2017. Today, we're seeing corporations and investment institutions securing their space on the network (i.e. PayPal, Square, and MicroStrategy), in addition to major hedge fund managers including Bitcoin in their portfolios.

However, as I see it, the most important story hiding underneath this wave of corporate adoption is sovereign adoption.

Headline from Bitcoin.com

In 2019, these three countries combined accounted for $214,684,688k in exports, making up approximately 1.14% of the global export volume that year.

Just as the Bitcoin network began with nerds and hobbyists to experiment with digital money, these early-adopting nations are conducting the first experiments in using Bitcoin for international trade settlement.

Who's next? Probably not China, Russia, the United States, or any European Union member states. They're too invested in our current system.

But what about Pakistan? Uzbekistan? Chile? Colombia? Guyana?

In my crystal ball, I see a small network springing up around our three early adopters, conducting some percentage of their international trade in Bitcoin. As these early adopters experience lower fees, faster transaction speeds, and more freedom (no longer beholden to the dollar's dominance and restrictions), other countries will notice, and the snowball will begin to grow.

Where is the tipping point? What percentage of global export volume needs to be tried in Bitcoin before it becomes a mainstream strategy?

This past year was full of surprises, but I don't think anyone is fully prepared for what happens next.

 

Cover Photo by Christian Lue on Unsplash



Final Sigma Finance
Final Sigma Finance

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