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U.S. dollar drops to two-week low; Bitcoin eyes $50k
- BitwiseFool 6y agoKeep in mind that the U.S. Dollar will always trend lower. The government actively wants a weaker dollar (for international trade advantages) and they also want an inflated dollar because that's how the US finances it's debt.
- tehjoker 6y agoThat's long term though, short term (years) it can oscillate.
- BitwiseFool 6y agoTrue, I made this comment with the long-term in mind.
- vmception 6y agoNo. When compared to other fiat currencies, which this article says in the first paragraph and how 99.9999% of the US dollar is traded, the US Dollar will not “always trend lower”. Because all fiat currencies are periodically weakening themselves, so in relation to each other this is not visible. Assets with a completely different and known emissions schedule will always be “inflation-linked”, including bitcoin.
- pjkundert 6y agoOne major company (eg. Apple) making a major purchase of Crypto is likely to cause serious havoc.
- sethhochberg 6y agoThis is basically what caused the spike we see in BTC price this week - Tesla purchased a lot of the stuff (somewhere around $1.5bn USD worth at their purchase time), and announced plans to start accepting it for their cars.
- pjkundert 6y agoTesla is only “major” to guys like us. Nobody in the masses really even knows or cares about them. Just like Crypto; nobody really knows about it — it’s just a big scary thing they don’t understand, that they are vaguely aware they’re maybe missing out on. When big names they actually know and invest in (Apple, Walmart, Citibank, ...) start investing, they’ll force their investment guy to get them some. Nobody (ie. 99% of the population) will, can, or should hold Crypto personally. They will just lose it. Disclaimer: I write cryptocurrency systems, have been involved with it since way before Bitcoin, and have tried to help “normals” invest. It is simply not. going. to. happen. The next gen stuff we’re working on? Now, that’s something normals could use. Safe, secure, error-resilient, forgiving. Something dad can set up and use without help. But in the mean time; DeFi alone is going to tear the doors off, let alone all the other uses.
- TechBro8615 6y agoIf being one of the top ten largest companies in the world by market cap does not qualify Tesla as “major,” I’m not sure what will.
- gher-shyu3i 6y ago> Disclaimer: I write cryptocurrency systems, have been involved with it since way before Bitcoin, and have tried to help “normals” invest. It is simply not. going. to. happen. What do you think the future of cryptocurrencies is if the vast majority of regular people won't invest in it?
- pjkundert 6y agoIt's not that they "won't"; they can't; it's just too complex and fragile for normals to want to understand and use safely. Heck, even most of us don't use Shamir's Secret Sharing to secure our private keys (or any other really robust method for securing/sharing). We all know what its like to help normals manage their password (!) for their 5 accounts... Beyond that, there is a fixation on A) Global consensus systems, and B) Deflationary assets -- neither of these can or should form the foundation of what we call "money"; too fragile and dangerous. See https://perry.kundert.ca/range/finance/holochain-consistency/ https://perry.kundert.ca/range/finance/holochain-consistency... However, next-generation offerings are promising to solve most of these shortcoming, including one that I'm helping implement presently. These could be useful to normal people, and quite easily wrap existing assets (Crypto and others) in value-stable and robustly exchangeable tokens. Many people will try to play with crypto, and will blow off their fingers while these systems get ready for release.
- modeless 6y agoAlready happened. Tesla is a major company now. #7 by market cap in the world. Bonkers, I know. I don't see others following soon, but you never know.
- mywittyname 6y ago> I don't see others following soon, but you never know. If other companies were going to accept BTC, they would have done so already. If you remember 5-7 years ago, there was a big push to accept BTC, so much so that local coffee shops and even NPR started accepting it for a brief period. I think Telsa is doing it to combat the short sellers that Musk is at war with. The $1.5 billion in BTC they purchased represents something like 2% of their net asset value and the prices of BTC can be readily manipulated up or down rather significantly with relatively little capital. Musk and his team are all much brighter and savvier than I am, so I could be wrong. But this strategy makes a lot of sense in context, especially considering the market cap of Telsa has reached absurd levels (growing 800% in one year).
- pjkundert 6y agoCrypto will be an asset class, never “money”. Nobody will generally buy stuff with it; except maybe other asset classes of investment. Fungible, large-scale, value-stable, user- and network-failure resilient cryptocurrency “money” is on the way, though. That’s going to be interesting.
- chizhik-pyzhik 6y agoIt's tempting to juxtapose two things like this and imply they're related, but it's more likely that this was a coincidence.
- suddenstutter 6y agoNo. Its always connected.
- jfengel 6y agoIt's more likely that "two week low" is a completely meaningless statistic and not worth doing a story about.
- fasteddie31003 6y agoThe US government benefits from inflation for two main reasons: 1. It lowers their debt. 2. It collects more taxes from capital gains. The average tax payer is burdened from inflation because their salaries do not keep up with inflation.
- mywittyname 6y agoDon't forget that people use wage & asset prices increases as a barometer for economic performance. People love to see their 401ks and houses increase in price every year. And they definitely love the news reports of wage increases happening at the fastest rates in decades. If welded correctly, inflation can make an administration look like economic wizards.
- Leader2light 6y agoYeah I'm sure the government knows what they are doing.
- Retric 6y agoInterest rates are pegged to inflation so at a steady rate it’s not particularly helpful for government debt unless they can run a surplus. The actual benefit from inflation is as an economic lubricant. People are less willing to sell assets at a loss, but tend to ignore low levels of inflation in their mental arithmetic. Also, holding savings as cash is now a loss which promotes either spending it or investing it. Most importantly small scale inflation reduces the risk of a deflationary spiral which quickly makes large debts impossible to pay back. Aka 0% to 2% is much better than -1% to 1%.
- ed25519FUUU 6y agoAnd things that can't be printed (housing, gold, bitcoin) become increasingly more expensive.
- chii 6y agohousing becoming more expensive is a result of bad city planning and zoning policies, rather than any other factor. Build dense, build more, and allow demand for housing to be satisfied.
- darkwizard42 6y agoThese two don't exactly feel related. I think BTC shooting up has more to do with Elon's announcement and the US dollar being weak might have to do with the trade advantages that come from it. edit: looks like a few other folks are also in the same camp of thought
- u678u 6y agoDrops to where it was two weeks ago. And about the same where it was 3 years ago, 6 years ago, and when the EUR debuted at $1.18 in 1999.
- john_moscow 6y agoI think, someone in the government has figured out that if you simply print money and hand it out to people, a sufficient amount of them will use it to buy stocks. So, on paper everything looks great: people are receiving stimulus checks, the stock markets go up and nobody ever bothers to look at the monetary supply graphs to see that your $1000 in the bank has lost almost 50% of its value since the beginning of 2020. If you care to define the value as a share of the overall money supply (which does not immediately translate to purchasing power, but will eventually do through supply and demand). In reality, the publicly traded corporations get unprecedented cash flows through stock value increases and low-interest loans, and together with very lax interpretation of antitrust law, can effectively destroy any competing business by subsidizing their offerings through channels that are not available to those who aren't a part of the club. I used to think that we are on a brink of another 2008-like recession, where the stock markets will crash and people will have to rethink what they do with their money. I think, this time it will be different - we may have some years years of roaring stock markets and stagnating wages, where a typical salary will barely cover a room in a shared apartment, followed by a massive civil unrest, where people will get disappointed in the unfair economic system and will proceed to just grab what they can by force. Interesting times we live in. [0] https://tradingeconomics.com/united-states/money-supply-m0 https://tradingeconomics.com/united-states/money-supply-m0
- akudha 6y agoJeez, that site has so much information. I wonder what their sources are
- me_me_me 6y agoAfter seeing how much money was printed and pumped into business, its no wonder stock market is going up. I was worried it will cause some inflation runaway effect fueled by the pandemic instability. But no. Despite what we have been taught - "You cannot just print money" - nothing happened. It really got me thinking either nobody has any idea whats going on and they just keep pushing the limits or we are at the bring of monetary crash.