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3rd richest man in Mexico Ricardo Salinas is quite bullish on Bitcoin! He is not alone in this belief.
There's a lot of major people with a lot of money going bullish on BTC. Either we're going to see a massive wealth redistribution away from these rich people who are buying BTC or they are faking people out, or...
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Here's the thing about BTC, it's accretive, meaning because there's a fixed supply over time (in the short term it's slightly inflationary but disinflationary) means it's basically like a bucket of fixed size and people putting money into it is like increasing the depth of water inside
So, for BTC to go down of course, logically, people need to be willing to sell. Now, as I think it was Tudor Jones who said from $20k to $3k something like 84% of people held, it's practically a religion. But if no one is willing to sell then the price can't go down.
So, the question becomes, what would cause the price to go down?
In my view there are probably 3 main risks I can think of:
1. Government regulation coming down hard on the use of BTC or how and where it is stored - if governments told businesses it was illegal to accept or deal with BTC that would be a possible death blow. The thing is I think this is unlikely because too many wealthy powerful people and their families are holding it including the politicians so I can't imagine them sabotaging their own wealth. Not impossible but strikes me as unlikely. I do think A LOT of regulation is coming and I think that's mostly going to be driven by powerful banking lobbies who essentially want to play the custodian role so they can get their cut so governments are basically going to say "you want to hold BTC no problem but you've got to hold it through a licensed custodian just like any other stock or bond in your brokerage account". This essentially makes it impotent as a means of exchange or commerce and turns it into a 100% pure speculative gamble. Now, because it's a religion I don't think that's going to stop the holding against fiat so I don't think it would crush the value at least in the short term
2. Competition - the fact is especially given time other technologies can do everything Bitcoin can do better, cheaper, faster, etc. I'm a huge believer for instance in what some people call "the flippening", which is Ethereum overtaking bitcoin as the highest market cap token. At some stage, if institutions continue to adopt Bitcoin, which I actually think is logical if you believe bitcoin is a counter inflationary asset then I think it's very logical that they'll eventually diversify beyond bitcoin to other tokens, and things like Ethereum just clearly become better because they offer all the same advantages plus they actually have real utility
3. Attack on the network - I've been wondering about this one and I think China might have made a big mistake by kicking the miners out of China. Consider this, it costs about $7 billion per year in electricity costs to overcome the whole bitcoin network. Now, the thing is you can't do it just with electricity you need mining hardware. Now, if you were China and you didn't want people to use BTC and you wanted them to adopt the digital yuan what seems like the best strategy? To me, it is to seize all the Chinese mining facilities and basically use them to overcome the bitcoin network and just run an endless supply of empty blocks. By doing this you'd quite likely trash the support for and belief in the network security, which is at the heart of bitcoin and it would in my view have a MASSIVE negative effect on the price. Of course, at the same time, they'd be getting the mining rewards, which they could then amass and dump on the market causing the price to further crash. I don't think it's beyond the realm of possibility that major governments might try to attack the network in ways like this to threaten it.
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