- The BTC/USD market has been rather quiet during the session on Wednesday, gaining 2% in the lead-up to the FOMC rate hike and statement.
- In a twist of irony, Bitcoin finds itself in the uncomfortable position of hoping that the Federal Reserve can bail it out.
- What I mean by this is that Bitcoin is only bond is a speculative asset, so therefore it will march back and forth due to liquidity.
The Federal Reserve has tightened monetary policy, which is just about killed Bitcoin in general. Bitcoin was supposed to be a hedge for inflation, but that has spectacularly blown up. Bitcoin was supposed to be “digital gold”, but all you must do is pull up a gold chart to see how incorrect that is. Bitcoin was also supposed to be a store of value, but a store of value does not lose 70% in a year. Finally, Bitcoin was supposed to be money, but nobody wants money this going to drop like the Argentine peso.
Looking to Fade the Rally
At this point, Bitcoin has become a solely speculative asset. We are seeing frauds and policies around the world blow up, which is common with the new technology. Bitcoin and its distributed ledger really are not new technology. It’s a much faster version of something that was around in the Middle Ages. However, it does have the potential to be an important form of something, we just don’t know what it is yet.
Now that all the frauds and criminals are starting to get taken out, there is the possibility that we may see a new dawn in crypto. The biggest question will be whether crypto can find a use in the real world. I understand that there are a lot of bits and pieces here and there that people use, but it’s a lot like mobile applications. What I mean by this is that if you look at your Apple Store or Google Play, you begin to realize that there are only about 7 different types of applications available. They are simply developers copying each other and at the end of the day, most of the applications are not exactly mind-blowing. For me, that’s how crypto has turned out, although there are a few notable exceptions. I think at this point, you still have a “fade the rally” mentality.
Ready to trade Bitcoin USD? Here are the best crypto brokers to choose from.