"It's Not Really About Bitcoin Price Surging, It's Fiat Currencies In Free Fall"

Tyler Durden's picture

Authored by Joseph Young via CoinTelegraph.com,

According to Stefan Molyneux, a highly regarded Canadian podcast host, it is more important to recognize the free fall of fiat currencies, more so than to acknowledge the exponential growth rate of Bitcoin.

Molyneux says:

“It's not so much that Bitcoin is going through the roof - it's that fiat currencies are in free fall, but only Bitcoin is noticing.”

The decline of fiat currencies

For many decades, governments have had absolute control over the global finance sector and monetary policy through the fiat currency system. Through it, central banks such as the US Federal Reserve have obtained the ability to inflate the supply of reserve currencies and to manipulate the world’s most widely utilized form of money.

In an interview with Fox Business, major electronics retailer Overstock CEO Patrick Byrne stated that fiat currencies will continue to fall over the next few years, as investors and the market move onto separate money and state.

As fiat currencies decline, the only form of decentralized currency that is Bitcoin and other cryptocurrencies in the market, will eventually overtake reserve currencies.

“You think that’s a bubble? What do you think that fiat currency you carry around in your purse is? This dollar stuff, it’s just some fiat currency based on … the surplus taxing authority of the US Treasury of which I assert there is zero ... It’s about time the world switches to real money. Either gold or Bitcoin,” said Byrne.

Currently, the two forms of money or assets that are not subjected to the control and manipulation of governments are Bitcoin and gold. But, as demonstrated by the Indian government in late 2016, because of its physical attributes, gold can be confiscated and repossessed by the authorities at their will.

With Bitcoin, confiscation of user funds and assets is not possible, if users store their Bitcoin on a non-custodial platform in which they have full control over their private keys and funds.

One major advantage Bitcoin has over gold is its transportability. Gold is a viable store of value given that investors can store large amounts of money in the asset. But, it is difficult to transfer gold, especially through borders.

Bitcoin will continue to prosper as fiat currencies decline

Considering that Bitcoin remains as the only viable alternative to fiat currencies, the decline of government-issued money will continue to lead more investors and general consumers into the Bitcoin market.

As such, Byrne noted that Bitcoin price could reach $1 mln in the long-term if Bitcoin begins to take over reserve currencies and challenge the gold market.

“We have all these currencies since Bretton Woods, fluctuating against each other, and maybe the dollar hasn’t gone to zero against these currencies but all of them have gone down 95 percent ... versus something that they can’t control like … gold and Bitcoin. So Bitcoin may be on its way to a million for all we know,” adds Byrne.

 

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Mementoil's picture

Complete and utter bullshit.
If people were truely buying BTC in order to escape inflation,

RAT005's picture

The headlines don't fit in with PM price action......it will happen, but it's not happening....

Blythes Master's picture

Yet another shitcoin shill piece by zeroduds.

Tyler, shitcoin is vaporware. Period.

His name was Seth Rich.

BullyBearish's picture

...same as prices of EVERYTHING rising...NOT

 

dollar turning to $hit...

IH8OBAMA's picture

An OVER THE TOP article by one of the Coiner publications.  Good for a laugh, though.

 

Dabooda's picture

The only thing wrong with  Molyneux's thinking here is the idea that Bitcoin will remain the dominant cryptocurrency.  Right now there's a herd-mentality stampede into BTC simply because people want in on a hot new investment that's going up like a rocket.   But for day-to-day utility as a currency -- BTC is probably  a long-term loser because of high transaction costs & slow settlement speeds.  Probably  more potential utility  in BCH, Litecoin or Ether -- I'm not a crypto-guru, maybe tmosley will enlighten us.

 

Fizzy Head's picture

not arguing that fiats are an epic failure for the bottom 90%, however bitcoin has many other facets that fit may ppl (so to pin the tail on failing fiats isnt accurate)...well unitl the .gov gets their grimey hands on the transaction data. the failing fiat argumanet only stands when PM's and oil get spensive along with BTC.

 

Most buyers arent the stuggling middle class, they are institions and speculators. and the rest are the ones that got in early...

 

p.s. agree with your thoughts on the heard mantality.

nope-1004's picture

Heard this same idiotic argument about PM's when they were on their march upward.  "It's not silver that expensive, it's the fiat around it falling apart".

Only so many times you can hear bullshit stories before calling them out.

Bigcoin is a speculative bubble.

 

OverTheHedge's picture

I love the way Tyler puts these articles up with no indication of whether they are good or bad, truth or fiction. Let Fight Club sort it out.

My opinion is that this is complete bollocks. "Magical thinking" is the new buzzword for "making up shit in the hopes that people believe it and give me money". There is hyperinflation around the globe, as all currencies tank, and yet the only good, commodity or service that has noticed, is an obscure,  hardly-used cryptocurrency stuck in the margins of the more esoteric investment world, but well-known purely because of its impossibly fast price-rise. Either the pricing of every single thing in the world is wrong or the pricing of bitcoin is wrong. 

NB I don't entirely discount the idea that every single thing in the world is mispriced. But I would definitely include bitcoin in that list.

pods's picture

Sorry, this is NOT about all fiat currencies going to shit.  It is merely about rent seekers all piling into one investment that they all think will give them some kind of return.

Sorry, the joobucks from heaven dries up and so does bitcoin.  

Can't wait until everyone tries to run for the exits to sell their $10k bitcoins. Their net worth will stay where it is until the music stops.  After that, look out below.

I guess people forgot about Pets.com?

Look at all the hot names now. Almost all of them make ZERO money. Their value stems from being able to sell it to someone for more than you bought it.

Amazon, NFLX, TSLA, BTC.  All gonna go up in a poof of smoke if the free money stops.

Sorry, bitcoin might be some great revolutionary thing, it's still being polluted with too much fiat sloshing around.

pods

DC Beastie Boy's picture

Free fiat via Tethers USDT that Bitfinex creates, they made $817M of them and trade on their own exchange.

https://coinmarketcap.com/currencies/tether/

Bitfinex has led the 1000% bull charge in BTC this whole year with oftentimes 20% of market volume.

Serious money creation and maybe 100% legal on this unregulated, never audited, centralized exchange.

Jtrillian's picture

The difference between a wise man and a fool is recognizing an opportunity when it presents itself.  Closed minded haters who  poo poo the idea of Bitcoin will miss out on yet another investment opportunity of a lifetime.

Gap Admirer's picture

The difference between a wise man and a fool is that the fool will call people closed minded haters instead of agreeing to disagree. "What?!?!? I'm a closed minded hater you say??? OK, then. That makes me see that you are correct in your analysis." LOL!

Bernie Madoff was the awesomest in the world for "investors" that got in early with that "opportunity" and got out at the right time. The non-Madoff investors were obviously closed minded haters...

Peak Finance's picture

This is pretty radical but:

Either the pricing of every single thing in the world is wrong or the pricing of bitcoin is wrong. 

Yes, if the free market does not exist anymore, and Gold / Oil / Paper / all depend on riggings, then, the pricing of every single asset in the world IS WRONG

This:

the pricing of bitcoin is wrong.

I am not saying the price of bitcoin is "right" but, generally speaking, The freer the individual market is, the closer the prices are to reality. 

wise_owl_says...'s picture

gold and silver not taking notice of 'freefall'

any_mouse's picture

Price manipulated to prevent early disclosure of the oncoming collapse.

Just like the hidden inflation in packaging and quality of consumer goods.

anarcode's picture

They're part of the stock market and being manipulated by central banks with futures, a trick that doesnt' work with cryptos.

lew1024's picture

Please define the difference for us between 'speculative bubble' and 'price finding for a product of unprove, yet possibly immense, utility'.

nope-1004's picture

lol....  You just said it yourself.  "Possibly immense" is pure speculation about an unproven item.  Anything is "possible".

 

shitshitshit's picture

molyneux's wrong: people are trying to make a quick buck in the bitcoin casino.

Guess what happens next?

pods's picture

Exactly.  Easy money leads to this kind of crap.

pods

sleigher's picture

I keep hearing the arguments about blocksize, but I also keep seeing that people don't really care.  At least it appears this way.  If blocksize is so important then why didn't everyone go to BCH the minute it forked?

Spaced Out's picture

Careful with the logic here buddy, you'll confuse a lot of people :D

CJgipper's picture

I foresee bitcoin acting like gold as a store of value and litecoin, ether, ripple, or some other currency acting like the dollar for everyday transactions, for the reasons you describe

OverTheHedge's picture

But why? 

Bitcoin acting as a store of value "like gold". Why not own gold?

If the answer is because the value of bitcoin  will increase by 12,000% over the next four days, then it ain't gold, and can't be used as a substitute for gold. A store of value doesn't change its price by multiple times, up or down. 

affirmed_78's picture

You have to understand bitcoin is still in the early adoption phase.  The price cannot possibly stabilize until it is mainstream and all investors who want to own it have some allocation.  That cannot occur at $11k bitcoin (< $200B market cap).  The price will have to go up many more multiples.  I believe the total value of all gold is $7-$8T.

 

What if you got to buy gold before it caught on?  It would be nice to ride the wave, would it not?

anarcode's picture

Bitcoin is higher quality money than gold.

btClunker's picture

I agree with you and not just because I own most of what you mentioned. Distributed digital ledgers are the best form of money for the twenty first century. Regardless of it being decentralized, there are pros and cons for both cases, it's the best money available to us today. 

youngman's picture

Venezuela just came out with their own cryptocurrency....boy I bet that takes off bigtime....lol

38BWD22's picture

 

 

Maduro no diria MENTIRAS, no?

Bwa ha ha!

TwelveOhOne's picture

The hilarious part is, it's called the "Petro".

Nice reference to the "petrodollar" which is one reason for their previous currency's demise!  (Not the only reason...)

MonetaryApostate's picture

The wealthy money printers are going cashless, after hyper printing the sh!t out of their own fake money, they are turning towards digital fake money so they don't have to print anymore, & so they can have utter digital totalitarian control.  Venezuela is NOT a unique instance, it will go global along with cashless societies being forced globally either through hyper inflation or demonetisation.

But of course I've been warning about this since 2008, as you saw the beginning of the system collapse & moving of all assets online.

Fake everything painted to you by the ultra wealthy money printers.

https://plus.google.com/collection/QorNbB

Momentarily Lucid's picture

Almost without doubt it will be Iota - a secure protocol for all mesh and net connected devices and machines with almost unlimited free transactions per second, no blockchain, no miners.

http://oracletimes.com/why-iota-miota-could-see-a-major-boost-in-2018/

joshnyce's picture

Government can't confiscate BTC? REALLY? Guess this guy knows a lot more than I do, because they can certainly take it, they can stop you from spending it, and they can even make it illegal. The idea that BTC is safe is absolutely moronic. Fiat is not better, and I'm not a goldbug, but at least pyhsical gold can be buried in the ground. Assuming you bury it someplace safe, there is nothing else that comes close to that level of security.

ejmoosa's picture

And if all those steps fail, they can arrest you or have you Clintonized...

shitshitshit's picture

well, you forgot boating accidents... It's even safer if you forgot in which lake you were canoeing.

38BWD22's picture

 

 

I'm getting antsy about my BTC holdings.  It's had a HUGE price spike, and while it could go much higher, I am thinking of "just taking the gift" (very decent gains), and be done with it.

Contributing to this is my email conversation with our tax accountant, who today informed that it will be much more complicated to do the Capital Gains calculations, especially with no good documentation on my part (for 2015).  This is going to be a mess.  And I am trying (and have been) to document all of this the best I can.

I may just make one more big SELL of BTC for gold, perhaps by year end, sell all of it other than a small "WTF amount" to keep me interested enough to keep in touch with cryptos.  Then do the 2017 reporting (which, happily, will be easier than earlier years as I have all papers in order).

 

Bottom Line:

.gov is much more powerful than many think re cryptos.  Don't mess with the IRS if you have big gains.  And I am actually TRYING HARD to comply!  

If you try to hide, unless you are extremely smart & tricky (I am not), you are risking BIG TROUBLE from .gov.  Their regulations are in place, and they use advanced software tracking blockchain transactions of interest to them.


hedgeless_horseman's picture

 

Well, DCRB, you can always sell just enough to cover your cost basis, plus any taxes, then HODL the rest.

Selling half when an investment doubles, then hoping it was the biggest mistake of my life, has long been one of my favorite investing tactics.

38BWD22's picture

 

 

h_h

I already HAVE sold enough BTC so that I have made my money back and more (cumulative, 2015 - 2017, selling BTC for gold).  Everything I now have is pure frosting on that yummy cake.  I think I just want out, and will Take The Gift (of more gain).  But, I will carefully decide what small amount to HODL in case the IRS in the future gets more aggressive (ie, demands to see ALL of your BTC hodlings -- which I think they can do), well then it would be simple to comply.

Hear ya about your variation on "selling too soon".

John Kerry-Heinz's picture

"Essentially the game is to flow the excess fiat into Cryptos where it’s not used to buy anything. So the hyperinflation doesn’t effect the general economy. It’s all about buying time …

The excess money needs to flow into Cryptos so it won’t pump up the Gold price. And the money flow is capitalizing the emerging financial system that may save parts of the West"

https://beforethecollapse.com/2017/11/04/conversation-with-warburb/


TheReplacement's picture

I heard that there are cryptos out there that allow you to create and use multiple addresses for transactions.  I cannot imagine trying to track that down, especially if you are going back and forth between multiple cryptos.

Winston Churchill's picture

You just coming to that realization DoChen ?

Seeing how they own and control all the infrastructure that CCs absolutely require to run upon.

So building a beautifull mansion in a swamp with no foundations could be a problem.

Whocouldhavenode ?

38BWD22's picture

 

 

Sir Winston!

I've always known about their monitoring the Entance & Exit Ramps of BTC (ex: jmbullion has to ship that gold to me, so...).

That's why the time may have arrived to bail, while I am way ahead.

There is wisdom in "taking the gift".

Pity that BTC is not as mobile and private as we had always hoped.  That's life.

Jack&#039;s Raging Bile Duct's picture

If you sell it directly for PMs, like some providers accept, wouldn't your IRS liability be zero, since no Fiat is involved?

38BWD22's picture

 

 

Nope, apparently not.  Bitpay, a service provider for jmbullion.com, turns BTC payment into CA$H for them.  JM's invoice is in US dollars.

So, paying with BTC that has gone up in value incurs a Capital Gain.  Them's the rules as I understand them.

Winston Churchill's picture

Very wise.

Why they haven't already cracked down on it is the interesting question.They can anytime they like,

whatever the pumpers say.I have several ideas that range from greed to outright fiendish.

One of the reasons slavery went out of fashion was the difficulty in "perfecting" the security(slaves)

as colateral.Think about that and titles on a blockchain.

Spaced Out's picture

Slavery didn't "go out of fashion", it was abolished by white men.