Firm believer in fundamentals of Bitcoin making it Gold 2.0
Release of my 2nd Bitcoin song yesterday
There was a time when I was so optimistic with Bitcoin, on the fundamentals that it’s Gold 2.0, and hedge against fiat inflation that I made a song explaining it.
Here is the link to my first Bitcoin song —
Now, with all the crypto traumas I have been through, such an enthusiastic positive crypto mood is not so prevalent in me these days, but I have just released my 2nd Bitcoin song (ha… crypto singer me), it was composed by me in earlier optimistic crypto times but I made the song live on youtube only yesterday.
Why one may ask did I sing another Bitcoin song?. Is that crypto enthusiastic mood back??, no not really!!! It’s just that I still believe in Bitcoin fundamentals that make it Gold 2.0.
Now, you can hear my 2nd Bitcoin song, made on the tune borrowed from ‘Mighty Mighty Red’ from the Angry Birds movie.
This year US FED has taught us how monetary policies affect value of fiat currency
These days, everyone is able to understand how a Government’s monetary policies, with the Government’s measures of rate hikes and rate cuts indirectly affects the value of a fiat currency.
US Dollars is the main reason of course. Being a World Reserve Currency, it is highly in demand by all countries of the world globally. Every country requires to maintain enough foreign reserves of USD as it’s used for world trade. US Fed’s rate hikes are removing liquidity of USD, that’s why rate hikes are referred to as monetary tightening.
As a result of this, everyone is wanting to protect their wealth converting to US Dollars, as it’s believed to be a safe haven asset. Cash is king and USD is the one supreme king now in the cash category…
Monetary tightening measures of US FED bringing down value of other fiat currencies
Yes… just go to the trading view platform and see for yourself that most of the world’s currencies are falling against USD….
Trading view chart. DXY Index
The DXY index measures USD’s value against 6 other major world country currencies and DXY has been climbing up past week after cooling from the top it made at 144 dollars, now it’s 122 dollars.
One can only imagine fiat currencies of emerging and underdeveloped economies faring far worse.
There have been requests made to the US to stop continuing its rate hikes because it’s dragging the world into a global recession.
So, the US FED’s monetary tightening moves are so powerful that it’s affecting the world’s economies…
Monetary mechanisms of BTC make its supply scarce and give it properties of Gold!!
Recently, the UK had its GBP, Great British Pound value fall against USD in September to such an extent that the Brits went ahead to protect their wealth by converting their GBP to BTC… Crazy at one level because we know BTC is volatile, it’s certainly predicted to fall further to 14,000$-12,000$ levels.
Still when people feel that their Government is endangering the value of fiat currency through their policies they shift to BTC because BTC’s issuance and supply cannot be controlled by any entity.
Unlike fiat currencies BTC supply is capped at 21,000,000 BTC and its issuance happens through mining done by BTC miners, and BTC issuance rate is pre fixed, getting cut every 4 years with the halving event.
So, right now Bitcoin miners receive 6.25 BTC as block rewards for successfully mining a BTC block but after the next halving on May 2024, these miners will get 3.125 BTC rewards for successfully mining a BTC Block.
There is less issuance of BTC as time goes by, reducing the circulating supply of BTC due to these monetary mechanisms of BTC.
This is why BTC is hard money as I explained in my earlier article.
People flock to Bitcoin when the fear of fiat currency collapse hits them
Case of Brits fearing possible collapse of the Great British Pound on September
In September, as can be seen in the tradingview chart, GBP value to a dollar has been on a free fall, and from September 23rd to September 27th it fell by 8%, this got the Brits worried.
So, now let’s analyse the BTC/GBP trading pair chart of the mentioned period above
Trading view BTC/GBP chart
During the corresponding period of time from September 11th to September 27th, BTC’s value against GBP rose by 16%!!
The trading volume of BTC/GBP skyrocketed on September 26th by over 1000% with the trading volume of that day being $881 million, while generally the average daily trading volume of the pair is generally at 70$ million…
So, people already have a tendency to flock to Bitcoin when they fear that their fiat currency will collapse!!
Case of Russians flocking to BTC when RUB collapsed against USD on February
During the time period of mid February to 7th March, Russia’s RUB fell by 50% against USD in response to Russia’s war on Ukraine and the international sanctions which aimed to make it impossible for Russia to conduct international trade by exchanging RUB.
Trading view RUB/USD chart
The Russians flocked to BTC by swapping RUB for BTC in exchanges, which is why during that period BTC rose against RUB by 85%!!!
Trading view BTC/RUB chart
Case of Turkish Lira last year as TRY fell significantly against USD…
Last year during the September to December period the Turkish Lira fell by 50% against USD.
Trading view TRY/USD chart
Now, let’s see how BTC performed against TRY in that period.
Trading view BTC/TRY chart
BTC had risen by 126% against TRY during that period, it certainly should be because TRY holders swapped TRY for BTC!!
All the above fiat devaluations were due to policy errors of respective countries’ Government
It’s important to understand that all these fiat currencies fell due to each country’s Government Policy.
GBP fell because of a controversial measure of tax cuts favouring the rich. At a time when inflation has to be controlled such a measure was unsound. It would also impact revenue earnings of the British Government.
A fall in GBP, will be followed by deeper falls as people cash out from GBP to other currencies like BTC and ofcourse USD pegged stablecoins like USDC, BUSD and USDT.
More on British government’s unsound monetary measures almost crashing the value of GBP is explained well by this Brit crypto educational youtuber CoinBurea here -
RUB fell because of the Russian government’s adamant stand of initiating war on Ukraine which has lead to global chaos with economic implications globally due to rise in price of oil and gas with Russia being a major exporter of oil and gas commodity.
TRY fell due to Government policy of tax cuts. This was an unsound move because inflation was already high in Turkey and a further rate cut only made things worse when other Governments like the US were gearing up that time for rate hikes to control inflation.
More on that in this crypto potato article…
Angry birds we are with our Governments curbing our wealth creation possibilities
Now, can you blame me if I sing a heroic song on BTC in circumstances like these?…
So, here are the lyrics of my Mighty, mighty Bitcoin to Rescue me song …
Mighty, mighty Bitcoin to rescue me,
Defender of our wealth and liberty,
Empowering Wealth ownership,
Hedging against fiat inflation,
freeing us from being power controlled,
Mighty Mighty Bitcoin to Rescue me
Tra la la la…la la la …tra la la la… la, la, la
We are angry with our Government’s Central Banks for their various monetary policies that are bringing down the value of fiat currencies causing inflation.
We are angry for other reasons, as they don’t allow us to own wealth in form of cryptos just because they feel threatened by cryptos replacing their issued fiat currencies and undermining their power…shrugs.
Bitcoin has never experienced a recession, it’s just a 13 year old asset class and till now its thrived in a decade old low interest rate environment of the US. Now, it’s been sold off like other tech stocks because of US FED’s rate hikes.
However, this according to me will not change Bitcoin as a digital asset sharing properties of gold, whose supply and issuance cannot be controlled by other entities.
Ofcourse, Bitcoin is not that mighty, we can look at Monero too for our financial privacy.
Enjoy my song Mighty Mighty Bitcoin to recue me!!!…
Tra Tra la la, la, la, la…tra, la, la, la…
The end…
