Dear Reader,
Bitcoin experienced a significant price crash several days ago on the news that China is making steps of limiting cryptocurrency servicing, investing and trading.
Actually, governments banning cryptocurrencies is the biggest risk the nascent digital currencies asset class is facing. If governments all over the world outlaw cryptocurrencies in a coordinated way the price of Bitcoin and other cryptocurrencies could go close to zero.
Will governments outlaw Bitcoin and other cryptocurrencies? No, I do not think so. Cryptocurrencies just provide many efficiencies by saving time, effort and money to both people and governments. Governments can tax Bitcoin transactions which actually increase the financial transactions revenue size since many people entered finance and investments that never before had significant interest in this area. Bitcoin and other cryptocurrencies increase the velocity of money which raises world's GDP, corporate profits and thus governments revenues. And after the coronavirus pandemic the world's leading economies took on massive new amounts of debt which has to be serviced.
In short, governments desperately need Bitcoin and other cryptocurrencies and the tax revenue they will provide. So barring irrational behavior or decisions the probability that governments will outlaw Bitcoin or other cryptocurrencies is small.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.
Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Respectfully yours,
Petar Posledovich
1 comment:
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