grand total of 21 million bitcoins have been mined, that’s it. No more new bitcoins. Right now, bitcoin’s supply is growing at 3.75% per year. That number will fall to 1.8% by May 2020. Then, it will get cut in half again four years later. New supply is shrinking just as central banks around the world loosen their monetary policies. It’s no wonder Intercontinental Exchange (ICE), which operates the New York Stock Exchange (NYSE), is racing to roll out an institutional-grade crypto trading platform called Bakkt. The simple fact is bitcoin is gaining acceptance as a store of value... or “digital gold.” So long as governments flood the markets with easy fiat, look for it to outperform. At face value, the Dark Ages are bad for bitcoin. The truth is... as always... more subtle. It’s actually fuel for bitcoin’s red-hot rally. Cryptos were designed for peer-to-peer transactions just like this. But peer-to- peer transfers only work if the two parties find each other. That’s where crypto exchanges come in. They connect buyers and sellers. DEXs attempt to eliminate middlemen by giving traders a place to meet online and transact without having to trust anyone else (like Binance) with their crypto. The sector shows great promise. But right now, DEXs are too slowand illiquid. They simply aren’t ready to take the reins from the world’s largest exchanges on many cryptos.
CoinMarketCap, bitcoin now accounts for more than 65% of the market. That’s a level we haven’t seen in more than 18 months. And we expect bitcoin’s market share to keep rising as Binance’s September 12 deadline gets closer. Second, the SEC stepping into the exchange market just helps legitimize the sector. It’s a sign that crypto is moving from the minor leagues to the majors. These changes couldn’t come at a better time for bitcoin bulls. As traders get forced out of smaller, more speculative coins and back into bitcoin, they’ll push bitcoin prices higher. And the world’s most-valuable crypto is already up 174% year-to-date. In fact, it’s outperforming every major asset class in the world. We believe the rally is just getting started. Remember, bitcoin isn’t just inflation- resistant... it will eventually have zero inflation due to a built-in “ceiling.” Once a HOW DECENTRALIZED EXCHANGES FIT IN A few days ago, I sold an older Ethereum miner – a stripped-down computer with nine high-power graphics processors added to it – and the buyer paid me with crypto. My smartphone wallet created a QR code (a two-dimensional barcode), which his smartphone could read. He scanned it and sent crypto straight to my phone. Within seconds, I had my money. No banks were involved, and the fee for the transaction was mere pennies.
American Consequences 69
Made with FlippingBook flipbook maker