Bitcoin: when price matters less than value
Some justify the fall in the price of Bitcoin by the lack of its real functional usefulness. Since the creation of the BTC, some analysts have called it a Ponzi scheme. Indeed, it depends on constant artificial speculation in the cryptocurrency market. Since speculators are attracted to everything that glitters, they lose interest in Bitcoin during the “bear market”.
However, Bitcoin is still trading at a much higher level compared to its lows in 2020 and 2021. Its implementation, which is increasingly taking place at the institutional level, is of real value. The printing of money by the Federal Reserve System and negative real interest rates have led to an end to the hype in the stock market. Bitcoin and other altcoins are also affected. Only after this chaos dissipates will it become clear which assets, projects and stocks really offer objective and tangible value.
Another interesting element is that Bitcoin is strengthening against the dollar, which is at a historic high, and the euro is experiencing difficulties and has now almost reached parity.
Another positive sign for the crypto market, which is growing at the expense of those who are already working.
A good trend: how to recognize it?
Given the current downturn in the market as a whole, traders need to rethink what a “good investment trend” is. Investments, by definition, should be associated with long-term confidence in the value of the asset, and not with short-term growth forecasts. In the case of Bitcoin, its price has increased by 331% since January 2020. The profitability of the S&P 500 is lagging significantly.
It also outpaces total retail revenue. Bitcoin is also outperforming all other assets, despite the fact that its rate has fallen by half compared to the historical maximum.
Currently, a culture of weak time preference prevails in the Bitcoin community. The term “weak” means long-term. He is fundamentally opposed to speculators who are set up on the principle of Ponzi, who constantly need a quick profit. This 331% is more than enough for holders who bought a crypto asset before the hype of the last two years.
The fundamental value of Bitcoin will remain real in the future for those who know how to wait. His critics accuse Bitcoin of requiring stock speculators to function. After the disappearance of the latter, they complain about the absence of these speculators. This proves that Bitcoin is not a Ponzi scheme.
The honesty of its current price indicates the honesty of its fundamental value proposition.