- In the US, the administration Biden sets the framework for fully integrating Bitcoin and other digital assets into the broader financial system.
- The decentralization bitcoin and its scarcity make it a hedge against central banks, politics and inflation.
- According to technical analysis and Elliott wave theory (o Elliott Wave), Bitcoin’s price action looks favorable going forward.
Bitcoin (BTC-USD) and other cryptocurrencies have been considered taboo by much of the market until recently. In no time at all, we now have professional sports teams, hedge funds and billionaires using and purchasing digital assets. President Biden has now released And Executive decree coordinate financial regulators to regulate and understand digital assets. Less than a decade ago, it seemed the US would likely have nothing to do with digital assets, as it operated as an anarchy compared to traditional financial systems. With many countries exploring digital assets, the US did not want to be left behind, which means that Bitcoin and other digital assets are here to stay. As inflation continues to rise rapidly, Bitcoin is becoming more and more attractive.
Biden’s executive order on cryptocurrencies
Joe Biden’s executive order regarding digital assets is a huge boon to active cryptocurrency investors and those who have been undecided. This decree will establish a regulatory framework for digital assets, allowing them to mitigate the use of digital assets for illegal activities such as money laundering and tax evasion. A regulatory framework will create a much more stable and secure market for those involved in digital asset trading. Even better, digital assets will be taxed as standard investments based on long / short term capital gains. Given that the government could easily have given digital assets their own tax bracket, this is great news.
Many advocates of cryptocurrencies would argue that government regulation of digital assets eliminates the foundation upon which they were built, which is decentralization. I would say you can’t have your cake and eat it too. While the decentralized nature of digital assets is attractive, it has allowed for money laundering, theft, tax evasion, trafficking and many other illegal activities. Not to mention the people who have lost large sums of money due to the loss of account keys and passwords. Regulating digital assets creates a framework for the market without destroying the principles on which they were built.
Bitcoin is worth considering as inflation rises
Bitcoin it has been shown to act as a store of value that it is unaffected by Fed decisions or central banks. The price of bitcoin is very volatile, but with the regulation going into effect, I think many more investors will feel comfortable investing in digital assets. Furthermore, I believe the regulation will significantly reduce the volatility observed in Bitcoin and other digital assets.
Bitcoin is particularly attractive in view of inflation because it is deflationary in nature. Inflation is the rise in the prices of consumer goods, which is usually directly related to the fact that the United States dilutes the value of the dollar through money printing and, more recently, stimulus measures. Store of value like Bitcoin derives its value from market demand and scarcity. For example, gold is considered a store of value because it has relatively high demand and is scarce.
However, there are 394 million pounds of gold mined, with 114 million pounds of reserves remaining (22.44% of the estimated total supply). What I mean here is that gold is considered the norm for a store of value, but there is still a lot of gold to mine. When it comes to Bitcoin, there are 21 million Bitcoins in total, with 19 million in circulation. This means there are only 2 million Bitcoins left to mine (9.52% of the total supply) and there will never be more than 21 million Bitcoins in existence.
As the United States prints more dollars and more gold is mined, almost all of the supply of Bitcoin is in circulation. The Bitcoin blockchain does not allow splitting or printing. In short, Bitcoin is the rarest asset on the market, unaffected by central financial systems or politics, and it is here to stay.
Bitcoin price prediction and recommendation
Bitcoin has dropped 7% over the past five days, a relatively large drop for Bitcoin as well. Considering that there are no fundamentals to use when analyzing Bitcoin, I will use technical analysis. I personally believe that the cryptocurrency market is moving towards the fifth wave of the “Elliott Wave” theory.. Elliott’s wave theory consists of five waves. Waves one, three and five are bullish trends, with waves two and four acting as pullbacks. Each progressive uptrend wave must create a new high and each progressive downtrend must create a higher low to validate Elliot’s wave theory.
In conclusion, the outlook for Bitcoin is excellent. The Biden administration is leading the way for the full integration of bitcoin and digital assets into the financial markets and bitcoin is proving to be as good a store of value as anything else. (apart from high levels of volatility). Bitcoin can act as a strong hedge against inflation, central banks and wider financial turmoil because it is decentralized and supply is scarce.