Everything indicates that in the coming months there will be a combination of highly beneficial factors for Bitcoin that could drive its price to new all-time highs. Let's analyze these elements to understand why this may be the time to accumulate Bitcoins in the face of what's coming.
In the first instance, the halving of the reward to Bitcoin miners that will occur in April 2024 will cause a strong contraction in the supply of new Bitcoins. Considering that its total stock is limited to 21 million and its issuance is decreasing, this will exert upward pressure on the price.
On the other hand, it is likely that the US Securities and Exchange Commission (SEC) will end up approving Bitcoin Exchange Traded Funds (ETF), which would open the floodgates for billions of dollars from institutional investors. Although it has been postponing its decision, it is feasible that it will do so just before the halving to ride the speculative wave.
Meanwhile, the Federal Reserve will be forced to cut interest rates starting in mid-2024 due to the economic slowdown, the banking crisis and the loss of control over inflation. This would cause a marked weakening of the US dollar. As Bitcoin has a fixed supply, it would become much more attractive as a store of value as the money supply expands.
Another factor that will pressure the dollar is the rise in energy costs, especially oil, forcing the US to issue debt to replenish its strategic reserves. Meanwhile, producing countries will choose to charge their exports in neutral currencies like Bitcoin instead of greenbacks that will devalue.
The latest US job market data is worrying, showing a drop in real wages, increased unemployment and net destruction of full-time jobs. This contradicts the official narrative of economic strength that the Fed uses to justify further rate hikes, which is less and less credible.
On top of that, Fed bailouts to banks reached half a trillion dollars just in August, reflecting an acceleration of the financial crisis. By lowering rates, banks will have fewer tools to generate profits and cope with these bailouts.
In conclusion, while the dollar loses ground in the face of the economic and energy crisis, with a Fed trapped between fighting inflation, saving banks and avoiding recession, Bitcoin will become scarcer and more valuable as a neutral store of value.
Institutional investors will desperately need alternative assets to protect themselves from the devaluation of the dollar. This is where Bitcoin ETFs will come in strongly, also attracted by the halving and the digital scarcity narrative.
Therefore, any drop in the Bitcoin price below $25,000 should be seen as an opportunity to accumulate in the face of this highly favorable scenario. Levels of $23,000 to $22,000 would be ideal to buy.
Other assets that will benefit are gold and silver, which also act as stores of value in the face of the depreciation of fiat currencies. It would not be surprising to see gold exceeding $3,000 an ounce in the medium term.
Beyond investing, it is advisable to prepare for a decade of high volatility through self-sufficiency, anti-system communities and learning to use Bitcoin as peer-to-peer money. Its direct adoption between users will be key when the global financial system collapses, a process that is already underway.
The coming years will bring with them a true monetary revolution and those who have internalized the value of Bitcoin as an alternative to the system will be on the right side of history. Those who persist in ignoring the warning signs will bitterly regret it.
This is not about being alarmist, but realistic. The current financial system led by the dollar and centralized banking is mathematically impossible to sustain. Sooner or later it will collapse under the weight of fiscal and monetary irresponsibility.
Due to its decentralized, limited and transparent design, Bitcoin is the only viable alternative when that moment comes. It represents nothing less than the separation between money and state, just as the internet separated information from the state decades ago.
The signs are clear: the elements are lining up in favor of Bitcoin. Its adoption is still minority, so its potential is immense. We will witness the greatest intergenerational transfer of wealth in history. Will you be ready? The time to become informed and take positions is now.
Image of my own creation and property. Generated with Photopea.
