Since the big break last January from around US$20,000 apiece (with some overseas exchanges briefly notching higher levels, the Bitcoin price (and by definition the entire crypto-asset space) has been working its way to the downside on a fairly consistent basis. After briefly holding around $11,000, it proceeded drop like the proverbial stone, aiming for $6,000, before turning around and and trading at present in the high $7,000s.
“Bitcoin’s going to zero” prognosticators like Jim Rickards, Peter Schiff, and for awhile JP Morgan CEO, Jamie Dimon (while his firm took “an opposing position” in the back office) seemed to be on the right end of the trade. Rickards did take a more “favorable” view of Bitcoin’s probable low, opining that it would likely bottom “around $200”.
But now, a number of uber-bulls have come out of the closet to strike a positive note.
Pantera Capital, an investment firm that does business exclusively in the cryptocurrency and distributed ledger sectors, believes that bitcoin has now printed its lows for the current (cyclical?) bear run.
In a bitcoin.com article quoting Pantera, the firm takes the view that the need to report profits for the 2017 tax year by April 15, caused significant downward pressure. However, a more interesting fact, is that the markets did not seem to pay much attention to comments by the Securities and Exchange Commission (SEC) about their intention to place a stronger regulatory framework around ICO’s in particular, and the crypto-asset sector in general.
Pantera stated: “The fact that the market didn’t react negatively suggests we’ve reached a local, if not global bottom.” In a tantalizing perspective on the distant future, they described their own work in the crypto space as being “in the first innings of a multi-decade trade.”
Further, they expect “a wall of institutional money” to drive bitcoin above the $20,000 level “within a year”.
Can you remember when one bitcoin traded for just seven cents?
Just seven years ago, one BTC could be had for just US$0.07 cents. Even as recently as 2016, a digital specimen would only set a person back $430. Nowadays, longer-term position traders are referred to, sometimes derisively so, as HODL’s. The story goes that in 2013, a post on the Bitcoin talk forum misspelled the word “holding”. Since then, for better or worse, the term has stuck around, and has been turned into an acronym, defined as a situation where someone intends to “Hold on for dear life.” A circumstance which anyone who did have some at seven cents and then decided to offset when they had a huge 10 or 20x profit at say, $1.50, no doubt sorely regrets!
Jeff Berwick, reporting from Zimbabwe
Zimbabwe went from being known as “the breadbasket of Africa” to importing wheat, brushes with mass starvation, and decades of political nepotism. Ten years ago, the country was introduced to the highest rate of hypeinflation the world has ever seen – an unbelievable one trillion times 10 to the 35th power – 50 zeros in a row of inflation. Trillion dollar notes, which at one time would only buy a single one of the few available eggs, are now sold as novelty items on the street.
So, the country has had quite a run with 30 years of rule by Robert Mugabe, now 94 and reported to be under house arrest. The new President, Emmerson Mnangawa, ominously known as “the Crocodile” – and who was once Mugabe’s right hand man – has promised better days.
8 currencies are currently accepted as legal tender. The U.S. dollar, introduced late last year and pegged at 1:1 with a new Zimbabwian “bond note”, now trades at 18:1…not a good sign. For the math-challenged (present company included) among our readers, this means their new “currency” is now, after just a few months, worth about .05 cents of its originally- stated purchasing power.
As soon as a person places money in a bank in Zimbabwe, it is devaluated by 40%. Deposit $100 – see a $60 credit to your account. A maximum of $50 in cash can be withdrawn weekly. Much of the little available cash is reportedly going into bitcoin. Interestingly, BTC now trades 50% – 100% higher (@ $12-$16,000 apiece) than in other areas of the world.
In a guardedly optimistic interview, The Dollar Vigilante’s, Jeff Berwick, speaking from Harare, Zimbabwe’s capital, recounts the current situation. Even though the unemployment rate is around 90%, he notes that “In the last few months, just with a little bit of freedom, with a little bit of allowing things to happen – everyone here tells us that things have started to get a bit better…”
Jeff concludes with “there’s a lot of danger here and a lot of potential.” It’s interesting how, the world around, it seems that if people are allowed the freedom to express their essential goodness and creative energies in a productive way, even a place that’s undergone three decades of destructive rule might just be able to turn a corner.
During the time it took to write this report, bitcoin rose almost $400. As the gloom lifts a bit from the “bitcoin blues” it’s looking like the cryptoasset space has quite a more than a bit of life left in it. When, not if the day comes that the historic Honest Money of the people – silver – is restored via a cryptographic monetary system, once again bringing trust, predictability and utility, financial nightmares like the many years Zimbabwe was forced to experience – and which Venezuela is still enduring – could one day become nothing more than historic curiosity.