Look at this statistic as it relates to the importance of personal finance to people. 6.4 billion people own smart phones, globally. Then how is it that only 3.8 billion people own bank accounts, globally? Bitcoin helps the unbanked have access to the greatest savings technology in human history. The unbanked can have an offline Bitcoin wallet without a bank account. Even in the most remote Islands in the world! Combine that fact with this, click here to read more. Here is the link to the second article.
Isreal and the EU are banning large cash payments. Partly to avoid cross border payments, partly to ease the transition to digital currency. Namely, CBDC, central bank digital currency. We have written a lot about CBDC. Central banks would track every dollar spent. Social media posts that represent what they disagree with, buying to much of an item they want to limit. Beef, Gas, Diesel, Power. Any of this could be met with an individual being cut off from access to their CBDC. It gives the state control over money. Even more so. Banning cash simply accentuates this. Eases the transition. See this chart below to show how many countries globablly are living with 6% or greater CPI inflation:
When a nations money supply inflates, the money loses buying power. The money does not go as far as it used to. Therefore, more money has to be printed. We end up with bail outs for corporations, bail ins for bank depositors. A bail in is when banks prohibit depositors from withdrawing their own money. See China. They parked tanks in front of their banks to stop depositors from rioting. So in sum total. Banks and central banks globally. Especially in the west. Are banning large cash transactions. Slowing down the ability to withdraw from banks. Stimulating their economies with money printing, and stimulus packages of varying types. This really became a global phenomenon after the onset of Covid 19 in 2020. As buying power is diminished, savings accounts drop. The depositor is victimized by this. Inflation is a tax!
However, the Bitcoin network which is called the blockchain. This is where Bitcoin transactions are stored. All transactions can be counted. The total amount of Bitcoin in circulation can always be accounted for. Every Bitcoin can be tracked through every owner in history, for each coin. No central bank or government has authority over Bitcoin. It is separate and apart from all over reach by any government or central bank. Therefore, Bitcoin is decentralized. There are millions of Bitcoin miners in over 200 countries mining Bitcoin. Below is a chart of the power of the Bitcoin network vs the top 500 super computers:
Here is a picture of a Bitcoin mine in a thermal box. These can be set up anywhere and everywhere:
Even if only one miner was mining Bitcoin. The difficulty adjustment could ratchet down so low that the network would survive. A block would be mined every 10 minutes on the blockchain. Proof of work is the electricity, and hardware required to mine the Bitcoin. This is the only way to ensure decentralization. Not to mention the sheer number of miners in the Bitcoin network. Node operators also secure the Bitcoin network and there are more of them, than there are Bitcoin miners. It is much easier and cheaper to operate a node. So, we have established that the Bitcoin network is secure. It cannot be hacked even with a Quantum computer. The difficulty adjustment can adjust more difficult or less. Either direction and there is no limit set to how difficult the adjustment can be. The network truly is that secure!
Now, where is Bitcoin going after the quantitative tightening and rate hikes have begun in 2022. Two years of money printing begat this reversal in policy. Bitcoin is down now. However, look at the latest two DXY charts. The DXY is the US dollar index. As we state often, Bitcoin is the inverse to the DXY chart. This next chart shows the DXY breaking below the parabola of it’s last year, worth of increases. In other words, the DXY has had a meteoric rise, which hurt Bitcoin in the last year. Yet, for the first time in a year, the DXY has broken the parabola to the downside:
Here is a close up of the same break out to the downside:
This kind of parabola took a year to create this trend line. Breaking it altogether suggests the DXY may be reverting in a new direction. When that does happen, historically, it brings about a reversal in Bitcoin. In this chart below we see the DXY on top, Bitcoin on the bottom. They are consistently inverted. If the DXY keeps it’s ongoing trend. Look for Bitcoin to make another run. How long it lasts, depends on the policies that impact the DXY chart. We have long maintained since late June that the Bitcoin bottom is in. See this chart below:
Now look at this inverted Bitcoin parabola chart. The $69K top from last November is at the bottom of this chart. Just like the DXY broke the parabola to the downside. Bitcoin in this inverted parabola (meaning it measures Bitcoin to the downside), has broken to the downside as well. Since this chart is inverted, that means Bitcoin is showing signs of a reversal:
We are not financial advisors and this is not financial advise. Bitcoin is the only chance for the unbanked to save outside the central bank system. Central banks do not look out for depositors, the unbanked, or the middle class. They help cantillionaires who are tied to the money printers. That often means politicians, fortune 500 companies, real estate developers, NGO’s. Most of us do not count as one of those. We need savings that will hedge the moves the central banks are making. Towards CBDC, totalitarian control over the money supply. More control than they have now. Bitcoin gives us this hedge. If the DXY keeps dropping, we will see this hedge in action. We cannot garauntee this will actually happen. Trends are now suggesting a reversal in the DXY, and we already showed all the charts pointing to the fact that the bottom for Bitcoin was back in June. We have to wait and see what happens.
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