Skepticism is always a cautious approach to any financial matter, especially when one is speculative, so put on your glasses skeptical reader and move on.
The problem is that now everything is speculative . Does anyone really think the bond market private sector 100 trillion (million million) dollars (ie, bet that debtors pay what you have borrowed with interest) is something "safe" guaranteed to bulletproof, as it is not possible to lose capital, etc.? And what about me market sovereign bonds (government) of 60 trillion dollars?
The problem with sovereign bonds is that governments, by central banks can create money out of thin air to pay interest and redeem the bonds come due, but this tends to depreciate the currency. So recover 100% of your nominal investment does not mean that you have recovered 100% of the value; If the currency in which the bond is denominated fell 50%, bondholders suffer a loss of 50% in the purchasing power of their initial capital. Oh! Is not that speculative?
And 70 trillion in global equities? Yes, we all "know" that the actions will never lose because central banks can continue inflating new bubbles credit indefinitely ... Make no mistake: history tells us that stocks remain a speculative bet.
And the $ 62 trillion in unsecured debt instruments? How much of this debt depends on shopping centers that are rapidly disappearing, real estate price bubble or fanciful valuations in other assets?
Financial assets totaling approximately 300 trillion. And this does not include real estate. Globally, the capital invested in real estate is estimated at 217 trillion dollars roughly two - thirds of the total available- wealth. Together, these assets totaling more than 500 trillion. And all are speculative. Yes, even real estate.
Then there is the foreign exchange market. Do you think that coins are not speculative investments? It is why wealth is fleeing Chinese yuan: because it is guaranteed that this money will never lose purchasing power? Is that why the euro fell from 1.40 to 1.05 dollars: because it is a safe and guaranteed investment? Venezuelans learned the hard way that fiat money, when it is poorly managed by the issuing country / central bank, can destroy wealth on a monstrous scale.
So now let's Bitcoin, with a capitalization of around 14 billion dollars and a recent peak of 18 billion. Compare that with 500 trillion (Millions of millions!). If there took one trillion, all current capitalization of Bitcoin is 1/70 of that.
Imagine a scenario in which tens of trillions in wealth is perceived at risk suddenly seeking an alternative -any alternative to staying in an asset class that begins to circulate in the desagüe-. We are used to the "rotation" that beautiful game in which the bonds can be sold instead to invest in real estate or stocks, or vice versa.
We are less accustomed to all conventional asset classes fall like dominoes. Where the trillions escaping from a global financial crisis are addressed when stocks, bonds and real estate fall simultaneously in the midst of a massive and chaotic sale? Gold and silver are shelters that have stood the test of time, but it is not difficult to foresee the imposition of measures limiting their usefulness as restrictions on the possession, trade or supply of precious metals. Some percentage of investors seek alternatives.
In such an environment, with a multitude desperately seeking outlets ever closer, what small segment of institutional and individual investors bet that the bitcoin could maintain or even increase its value while other asset classes lose it?
Suppose 1/10 of 1% of the wealth fleeing panic betting that Bitcoin is a safer haven than conventional assets declining.
1% of 300 trillion in financial assets (leaving aside the 200 trillion in real estate) is equal to $ 3 trillion, and one tenth of that equals 300,000 million.
And what about the price of bitcoin if 300,000 million come seeking refuge? Market capitalization 20-fold increase over the current level. And given the inelasticity of supply of bitcoins, the price would also increase 20 times.
And if 1/10 of 1% of global financial wealth flowing into bitcoin awakens your disbelief, I bajémoslo to 1/20 of 1%, or 150 billion dollars. Still, the market capitalization and the price of bitcoin be multiplied by 10.
That is the way to a bitcoin $ 10,000. Unlikely? Maybe. But if you think 500 trillion in current assets could be seriously threatened in a global crisis, then a small portion of that wealth rapidly evaporating find a home in Bitcoin (or other criptomonedas) should not seem far - fetched .
You want something "crazy"? How about some 3 trillion dollars in capital fleeing in panic into Bitcoin? Yes, a complete, gigantic, enormous 1% of global speculative financial "wealth" ...
(It's worth doing the same exercise with gold, just you should take 6.4 trillion (million million) dollars in market capitalization (ie, all gold does not belong to central banks) instead of 14,000 million dollars, which is the current market capitalization of Bitcoin).
The criptomonedas are inherently volatile and speculative. Anyone considering investing in criptomonedas should keep this in mind at all times. No security "guaranteed" 'There's nothing garantizado-.
The problem is that now everything is speculative . Does anyone really think the bond market private sector 100 trillion (million million) dollars (ie, bet that debtors pay what you have borrowed with interest) is something "safe" guaranteed to bulletproof, as it is not possible to lose capital, etc.? And what about me market sovereign bonds (government) of 60 trillion dollars?
The problem with sovereign bonds is that governments, by central banks can create money out of thin air to pay interest and redeem the bonds come due, but this tends to depreciate the currency. So recover 100% of your nominal investment does not mean that you have recovered 100% of the value; If the currency in which the bond is denominated fell 50%, bondholders suffer a loss of 50% in the purchasing power of their initial capital. Oh! Is not that speculative?
And 70 trillion in global equities? Yes, we all "know" that the actions will never lose because central banks can continue inflating new bubbles credit indefinitely ... Make no mistake: history tells us that stocks remain a speculative bet.
And the $ 62 trillion in unsecured debt instruments? How much of this debt depends on shopping centers that are rapidly disappearing, real estate price bubble or fanciful valuations in other assets?
Financial assets totaling approximately 300 trillion. And this does not include real estate. Globally, the capital invested in real estate is estimated at 217 trillion dollars roughly two - thirds of the total available- wealth. Together, these assets totaling more than 500 trillion. And all are speculative. Yes, even real estate.
Then there is the foreign exchange market. Do you think that coins are not speculative investments? It is why wealth is fleeing Chinese yuan: because it is guaranteed that this money will never lose purchasing power? Is that why the euro fell from 1.40 to 1.05 dollars: because it is a safe and guaranteed investment? Venezuelans learned the hard way that fiat money, when it is poorly managed by the issuing country / central bank, can destroy wealth on a monstrous scale.
So now let's Bitcoin, with a capitalization of around 14 billion dollars and a recent peak of 18 billion. Compare that with 500 trillion (Millions of millions!). If there took one trillion, all current capitalization of Bitcoin is 1/70 of that.
Imagine a scenario in which tens of trillions in wealth is perceived at risk suddenly seeking an alternative -any alternative to staying in an asset class that begins to circulate in the desagüe-. We are used to the "rotation" that beautiful game in which the bonds can be sold instead to invest in real estate or stocks, or vice versa.
We are less accustomed to all conventional asset classes fall like dominoes. Where the trillions escaping from a global financial crisis are addressed when stocks, bonds and real estate fall simultaneously in the midst of a massive and chaotic sale? Gold and silver are shelters that have stood the test of time, but it is not difficult to foresee the imposition of measures limiting their usefulness as restrictions on the possession, trade or supply of precious metals. Some percentage of investors seek alternatives.
In such an environment, with a multitude desperately seeking outlets ever closer, what small segment of institutional and individual investors bet that the bitcoin could maintain or even increase its value while other asset classes lose it?
Suppose 1/10 of 1% of the wealth fleeing panic betting that Bitcoin is a safer haven than conventional assets declining.
1% of 300 trillion in financial assets (leaving aside the 200 trillion in real estate) is equal to $ 3 trillion, and one tenth of that equals 300,000 million.
And what about the price of bitcoin if 300,000 million come seeking refuge? Market capitalization 20-fold increase over the current level. And given the inelasticity of supply of bitcoins, the price would also increase 20 times.
And if 1/10 of 1% of global financial wealth flowing into bitcoin awakens your disbelief, I bajémoslo to 1/20 of 1%, or 150 billion dollars. Still, the market capitalization and the price of bitcoin be multiplied by 10.
That is the way to a bitcoin $ 10,000. Unlikely? Maybe. But if you think 500 trillion in current assets could be seriously threatened in a global crisis, then a small portion of that wealth rapidly evaporating find a home in Bitcoin (or other criptomonedas) should not seem far - fetched .
You want something "crazy"? How about some 3 trillion dollars in capital fleeing in panic into Bitcoin? Yes, a complete, gigantic, enormous 1% of global speculative financial "wealth" ...
(It's worth doing the same exercise with gold, just you should take 6.4 trillion (million million) dollars in market capitalization (ie, all gold does not belong to central banks) instead of 14,000 million dollars, which is the current market capitalization of Bitcoin).
The criptomonedas are inherently volatile and speculative. Anyone considering investing in criptomonedas should keep this in mind at all times. No security "guaranteed" 'There's nothing garantizado-.