This entry is part 2 of 3 in the series Two Minute Crypto

Please click the link to listen to the 16th episode of my weekly crypto podcast ‘Two Minute Crypto’ These are intended to be short, single-topic ramblings on some aspect of the cryptosphere. Comments and critiques welcome.

https://itunes.apple.com/au/podcast/two-minute-crypto-wild-thoughts-2/id1441492450?i=1000425264610&mt=2

or

https://www.podbean.com/media/share/pb-39sqb-a12a62

Transcript

Two Minute Crypto -Wild Thoughts 2

Welcome to Two Minute Crypto – Today I’d like to add the next installment to the ‘Wild Thoughts’ series – and pose the question whether it is likely a central bank be the catalyst for a major jump in the price of Bitcoin?

OK so we all know we’re in an extended bear market – each perceived level of support has given way as the next and the next. When focused on such grim and grinding price action any positive outlook can be difficult to formulate and optimism can feel entirely hollow. And yet there’s so much to be optimistic about, project main net launches, tech development, use case implementation, new partnerships, the building of a crypto infrastructure and the slow but meaningful penetration of the crypto narrative into the broader social landscape.

On that optimistic note – let’s explore what, in my opinion, is a possible, even, likely catalyst for a future price explosion for Bitcoin. Namely, the first time a central bank – any central bank, adds Bitcoin to their balance sheet – it won’t have to be much, say a few billion or so – a drop in the ocean for any central bank. But that drop could release a tsunami of interest in BTC – once one central bank dips its toe into crypto – others will surely follow. The first movers in this instance are extraordinarily likely to see massive returns on investment. It’s this knowledge that may eventually tempt the monetary authorities of a nation to diversify into crypto. The lockstep adherence to the old financial legacy system is not set in stone. It’s strong until the very moment it isn’t.

So, which central bank might take the leap – it likely won’t be one of the big boys – the Americas and UK’s of this world who have such a vested interest in maintaining the status quo which favours them so strongly. But a somewhat financially marginalised nation, a Brazil, a Vietnam or a Philippines or independently minded nations such as Switzerland or Sweden may well go their own way and break ranks. Japan a nation mired in low growth, high debt, a declining population, and economic output may see an opportunity for growth which has eluded them for decades. Lastly, perhaps Russia might decide to act on its call for a move away from the dollar as the world’s global reserve currency. Once the door is pried open – welcome to the flood. A wild thought, perhaps? But in my opinion over a long enough time-frame a near certainty.

Thanks for listening.

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Responses

  1. Nicholas

    I’m not sure, this is good or bad for the crypto, on long term. The banks give some advantage, like rules and other things, but if you think about it, the bitcoin was created to avoid the banksystem, coz that system is vulnerable and most of the cases, parasite-like system.

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  2. Workin2005

    Excellent podcast as usual. I think you’re right on point. Once central banks take the leap, there will be no closing the flood gates. We knew institutional money wanted in at lower prices. The ground is being prepped for massive growth. In my mind, this isn’t a matter of “if”, but rather “when”. Rate later…

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    1. CryptosDecrypted Post author

      Thanks for the supportive comments @workin2005. Agree with all your comments. The idea that institutional money would simply buy at inflated prices given their ability to move markets is simply naive. At some point, they will be happy to move the needle in the other direction.

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  3. Miguel A. Cabanes

    It sounded so hopeful that for a moment I forgot all my losses! Heh, heh!
    But you are absolutely right: it only needs a small catalyst, a little step from some bank that others follow and finally we will have the future we have worked for.
    Because, as you said also, this is not just a question of money but of technology, of creation of applications, of a new era, after all.

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  4. miti

    Hai lanciato un’ipotesi molto affascinante, anche se la BCE si è già espressa negativamente sul riconoscimento di qualsiasi criptovaluta o sull’idea di lanciarne una propria. Il Giappone è uno dei paesi più crypto-friendly, così come la Svezia che ospita un gran numero di mining farm.La sorpresa in effetti potrebbe essere proprio la Russia.. ottimo articolo, amico mio. 😉

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  5. Adil Elias

    These are great thoughts, maybe it would be better if it’s a country the size of Brazil but I don’t see Brazil leading the way to be honest – especially after living in Brazil for a few years – I think it could be somewhere in Asia, either South Korea or maybe Malaysia, Malaysia actually seems like a pretty crypto-friendly country. But who knows, right?

    Thanks for another awesome post!

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    1. CryptosDecrypted Post author

      Cheers @the-alien. I agree it would be even better if were a large nation but a smaller state as you note is more likely to take the first step. Appreciate the supportive comments you always take the time to write. I lived in Korea for seven years – I have no doubt they will continue to lead the crypto world in terms of adoption – they are truly tech absorbed already.

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