Bitcoin price has pulled back slightly from its highs, but the trend has been rising for over a year and is likely to continue as emerging technology becomes widespread by institutions and traditional market investors.
In the future, according to a top industry metric, the cryptocurrency will become a kind of “testimony” that evaluates the government and its monetary policy management. Here's what this means for Bitcoin and why the asset will ultimately take on such a role.
Bitcoin becomes testimony to the government
The narratives that power Bitcoin these days are almost endless. There is the devaluation of precious metals through the digital gold narrative. the currency as the future of collateral; "The Stimulus Asset"; and much more.
Related reading | Bitcoin price could close March with the first quarterly bear signal
The next narrative and role cryptocurrency will play will be "a testimony to how citizens believe the government is managing their finances," according to Mike Novogratz, CEO of Galaxy Digital.
"We are breaking new ground with the amount of money we print and #Bitcoin is a testament to that." – @novogratz pic.twitter.com/SHavy76xSh
– Swan 🦢 SwanBitcoin.com 🚀 (@SwanBitcoin) March 15, 2021
These feelings are reflected in Bitcoin expert Preston Pysh, who recently described the cryptocurrency as a “manipulation knife”. Both comments refer to the rapid growth of wealth in response to the continued expansion of the money supply, which is being fueled by government-led stimulus packages.
The United States, for example, has just approved and begun issuing taxpayers' economic checks for $ 1,400 apiece.
Bitcoin is already working as a testimony and giving the government a failed grade Source: BTCUSD on TradingView.com
The cryptocurrency completes the "secular shift" before reaching the grade
Currently, the cryptocurrency is pulling back after a rejection of new highs, but this recent misuse of taxpayers’s money and a trillion dollar bill that the nation’s citizens will pay for years, says Bitcoin will grow significantly if the testimony theory is solid is.
When the first economic stimulus began in 2020, Bitcoin price was still hovering from the panic sell-off on Black Thursday when the pandemic first broke out. The first stimulus checks invested in BTC with $ 1,200 would be worth more than $ 11,000 today.
Related reading | Expert opinion: BTC has become a monetary “manipulation knife”
Those who voted against the government with their dollars that day now have substantial profits to show. The more the government badly manages monetary policy, the larger the market capitalization of the cryptocurrency becomes, enabling the “testimony” effect mentioned by Novogratz.
Until then, however, Bitcoin has yet to make the ongoing "secular shift" in which the asset class has been validated in the eyes of finance, and now every insurance fund, foundation and more needs to start adding it to their portfolio, or risk, capital growth to miss in a disruptive sector.
Featured image from deposit photos, charts from TradingView.com