Bitcoin

Warren Buffett is pessimistic about the market, a vision of Bitcoin in ten years, and more

We start the countdown of the halving and the emotion can already be felt. Smells of Bitcoin-style pizza. On this day you have to celebrate it one way or another. It is a sensation similar to that of the new year. But better, because we usually spend money in the new year and make money now. There is new optimism. Investors buy Bitcoin on the eve of the halving. We are facing very tough resistance. The $ 10,000. That is a very big fish. Bitcoin hasn’t spent many days above that number. How long will it take? I don’t know, but this new upload feels great.

Well then Let’s talk about the week’s most popular crypto news.

Certainly, this new phase of optimism has raised the price considerably. Today’s situation is very different from Black Thursday. Bitcoin fell like all markets at a time of panic caused by the uncertainty surrounding the corona virus. The fear went viral and all markets suffered. Of course, $ 5,000 a week Bitcoin wasn’t sustainable long before the third cut in half.

Warren Buffett is pessimistic about the market, a vision of Bitcoin in ten years, and more
Warren Buffett is pessimistic about the market, a vision of Bitcoin in ten years, and more

Investors are not that irrational. Obviously, a bitcoin under $ 7400 is practically a gift. This support is very strong. And it was reasonable to go back to him after our brief period of madness.

We are now facing the resistance of $ 9,200, $ 10,400, and $ 11,400. These were very hard walls. Sure, they broke in the past, but not for long. It wouldn’t be a surprise if we saw setbacks. And let’s repeat the previous scenarios. We could be in an overbought phase because this move is far from the averages.

Halving has caused a lot of excitement, but it is likely that many investors are raising false expectations. Suddenly, the whole thing is overvalued because the price of Bitcoin did not increase significantly until 10 or 11 months later during the previous halving.. Of course, this halving does not have to be an exact replica of the previous one. The situation is very different now and that could lead to slightly different scenarios.

Warren Buffett has been warning for years that valuations are extremely high. That’s why he hasn’t made any big acquisitions lately and built up a huge pile of money. Many of us assumed that Warren would dance with happiness and shop like crazy during this crisis. However To the surprise of many, he doesn’t buy anything. In fact, it sells this time. He sold all of his positions in the aerospace industry and slightly increased his cash stack.

The point is that Warren Buffett thinks this will take a long time and the worst is not over yet. The markets fell sharply. However, liquidity increases and deconflation plans have brought new hope. We have seen recovery. But Apparently, Warren believes things are getting ugly. I assume that the reports that your company receives are not very encouraging. Therefore, you need your money to take care of your home.

The debate about the correlation between stock markets and Bitcoin is eternal. Many in this area consistently insist that Bitcoin does not correlate with the stock markets. It is the idea of ​​digital gold and safe haven that I go to the moon during a crisis. This idea is almost religious and as much as the data question it … well it’s complicated. S.It has always made me so curious that such a dynamic and interesting asset as Bitcoin wants to be associated with a boring asset like Gold. You could assume that Bitcoin was born out of optimism and is not as afraid as gold.

The adventure of making predictions is extremely stupid. Most likely we will fail. Even if we’re right, we’re always half right. However It is a very fun exercise. In addition, our vision of the future speaks volumes about our present. He tells us about our aspirations, our doubts, our values ​​and our fears.

About Bitcoin in 10 years, you could talk about two aspects of Bitcoin. First, we could refer to the price. Frankly speaking, it is not inappropriate to speak of nearly a million dollars. Well, between 500,000 and a million. We have to remember that in 4 years it will be the fourth halving. And it’s possible that we made it with a bitcoin for at least $ 100,000. We always like to talk about heights. But honestly, the highs don’t last long. In 2017, we reached $ 20,000 per unit. But if we go to the averages, we would see a completely different number. More than the maximum values, lThe average values ​​and minimum values ​​are numbers that come closer to our everyday life.

Another aspect that we have to consider is that of adoption. It gets complicated here because I don’t know that the crypto community doesn’t accept concessions in this area. However I don’t see the idea of ​​Bitcoin everywhere as likely. Let me explain We could all have Bitcoin in 10 years, but we could use second-tier solutions that use stablecoins for retail. They would be hybrid systems. For example Today there are companies that lend fiat money and accept cryptocurrencies as security. You can repay the loan when the price of Bitcoin rises. Also This solution is perfect because it has tax payment benefits. Fiat is accepted everywhere. So we would have the best of both worlds in one. In ten years we could have more of these mixed payment methods. Of course, that’s just my speculation.

We have to be very careful not to get superstition. In many cases we just see and think things the way we want them. Sometimes we sin with delusions. Because we have money in Bitcoin and we dream that the price will rise incredibly soon to be able to buy this new car and drive to Honolulu for a second honeymoon. However The constant dreaming of the rise of Bitcoin is sometimes not very useful. We have had to recognize this since 2017 Bitcoin rises to $ 100,000, but we haven’t passed our all-time high yet. Sometimes you have to go ashore.

OK, OK, but we have to recognize that the trend before this halving was too lateral. We have seen volatility. Falls and recovery. But in general, if we go to the numbers, the page took a long time. You can see in the graphics. Before the previous halving, there was a slightly rising line, but on this line it is too horizontal. My antennas tell me that Bitcoin has been undervalued for a long time. Investors will wake up sooner or later.

Sure, halving by halving the miners’ reward affects the profitability of mining. The stock-to-flow ratio will increase significantly and Bitcoin will be an even scarcer commodity. Miners will not sell their bitcoins at a loss. Definitely They will use Fiat to cover their expenses and later sell their bitcoinswhen the price goes up. This significantly reduces the downward pressure that miners place on their sales. However, this halving differs in one respect from the previous ones. This time we have futures contracts. And that can change the equation above a little.

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