BITCOIN IS DOWN, BUT ITS CASE IS MORE COMMANDING THAN EVER the real reasons for Bitcoin's recent decline, as well as how the Davos globalist goal is involved.

 

Financial markets have fallen more than 30% from their recent highs as a result of the Federal Reserve Board removing the punch bowl from the market participants' inebriated hands by raising interest rates. A recession (also known as stagflation) now appears to be on the horizon.

Similar to the currencies of underdeveloped nations, the yen and the euro are inflated.Commodities and inflation skyrocket.

Unbeknownst to the uninformed and brainwashed masses, who believe that this is just a local conflict and that "peace" can be achieved in spite of Western countries selling an endless supply of weapons into the war and pouring billions of "freshly printed" U.S. dollars and euro debt into the conflict, adding fuel to the fire, the spark for WWIII has been lit in Ukraine.

Then there are the suicide sanctions, which are having a far greater economic impact on the Western countries imposing them than on Russia itself.

Anyone with a functional brain can see that 10 years of sanctions have completely detached and protected Russia from Western economic assault. The cherry on top is that, in its brief 12-year lifespan, bitcoin has now died 459 times.

THE PROBLEM IS FINANCIALIZATION

The expanding financialization of the business could endanger Bitcoin, as I predicted and warned about in this essay from February 2021. Wall Street's preferred cryptocurrency sector, the DeFi, has adopted its standard strategy of excessive debt and leverage, bringing a throng of fools and shitcoiners who were permitted to leverage their bitcoin stock 100 times or more in order to invest on altcoins like LUNA. This ZeroHedge essay here provides a clear explanation of the leverage and deleveraging process. Everything is fine up till reality sets in sooner or later. The only genuine item deposited as collateral (bitcoin) is then sold to make up the losses when shitcoins are always exposed for what they ultimately are, which are scams.The cascade liquidation of collateralized bitcoins follows the deleveraging. The wise money buys back bitcoin at a discount after eliminating the losers.

While "becoming your own bank" is one of the main goals of Bitcoin, DeFi instead seeks to recreate the current fractional banking system, along with all of its dangers and risks. As this article in Bitcoin Magazine rightly notes, "Crypto lending companies like Celsius are fractional reserve banks in theory; however, this time there is no "lender of last resort" in the form of a central bank to bail out the founders and their clients when things go south."

"Let's be clear about one thing: a yield must always originate from somewhere. The institution providing the yield must use the clients' money in a variety of ways to earn a positive yield on a rare asset like bitcoin. Furthermore, unlike banks, which are subject to strict regulations governing what they can do with customer deposits (such as facilitate mortgage loans or buy treasuries), cryptocurrency lending companies are essentially free to invest customer deposits in casinos of all kinds, including DeFi yield farming, staking, and speculation on obscure altcoins.

While this cycle of washing and rinsing is nothing new for experienced Bitcoiners, and one could argue that it is necessary to purge the market of excesses, I believe there is one new, concerning, and more mysterious aspect to it this time.

DAVOS CROSSHAIRS AND WHAT EVERYONE'S MISSING WITH BITCOIN

Bitcoin is the "wrench thrown in the engine" of the globalist agenda: global money, worldwide government, and ultimately global servitude, as I explained in this series of articles Part 1 here and Part 2 here. Since Bitcoin is a fully decentralized, immutable, uncensorable peer-to-peer settlement asset and parallel payment system with cash-like finality, the only real way to limit its adoption is to try to stigmatize it. This is accomplished through the standard FUD and mainstream media fear tactics , and — possibly more successfully — by sharply depressing its price through cleverly planned attacks on highly leveraged shitcoins that accept bitcoin as collateral.

One illustration is the fall of Terra/LUNA. Whose fiat phony money was used in the attack is unknown for sure. Although they formally denied involvement, Blackrock and Citadel—two of the most important Davos participants in furthering the globalist agenda—were suspected to have played a significant role in the attack. The idea still stands, though, that you would need to be a major player or at the very least have someone with deep pockets to back you up in order to borrow 100,000 bitcoin, which is worth around $3 billion, to carry out the attack. It will be quite difficult to find out where the money originated from.

The vast amount of fiat-based debt created ex nihilo will always be used by the privileged few to expropriate real assets like gold or bitcoin until the current fiat-based system, which gives to the few close enough to the spigots of "fake" money the "great privilege" to fight wars, colonize, and enslave others without cost, collapses. This is the key argument against playing the corrupted fiat game with DeFi and shitcoins and maintaining direct custody of one's bitcoin.

DEFI AND ALTCOINS SHOULD BE AVOIDED BY BITCOINERS

DeFi and other cryptocurrencies are ultimately nothing more than Wall Street's newest gaming playground. The issues are well-known: excessive leverage, derivatives, derivatives on derivatives in a never-ending series of liabilities, contagion, and escalating insolvencies when things go south. There is one significant distinction between cryptocurrencies and DeFi, though: there is no Fed to support risk-takers. Unfortunately, the only stable cryptocurrency asset that can be used as collateral in the market without counterparty risk is bitcoin. As a result, in the event of market insolvencies, bitcoin will always be vulnerable to extremely high volatility. It has happened before and will happen again.

DeFi's artificial yield game will ultimately pit one's bitcoin reserve against it. All bitcoins that are kept in the possession of a third party or pledged as collateral will be used against their rightful owner. It will be lent out or used as collateral in a leverage game that spirals out of control using shitcoins and unstable coins. The only actual asset pledged as collateral is liquidated as prices decline, starting a chain reaction that results in ever-increasing margin calls and liquidations to cover the losses. Both the speculative cryptocurrency position and the collateralized bitcoins will ultimately be lost.Smart players can profit from shorting the shitcoin, betting safely against bitcoin on the futures market (they are causing the price drop so it is a safe bet), and closing the positions by purchasing the cheap bitcoin of the suckers by taking advantage of the structural flaws of fragile protocols like Terra/LUNA. By also going long on the futures market, they can increase the stake by a further doubling. Given sufficient "firepower," a simple and safe gamble. The leveraged debt-based fiat economy also gives traditional finance a lot of firepower. Unless, of course, Bitcoiners wake up and decide to stop using their coins as collateral and stop gambling at DeFi's casino.

BITCOIN IS STRONGER THAN EVER, IN REALITY

Truth be told, this retreat has very little to do with bitcoin itself, much like the majority of previous ones.The protocol has never been more robust. You may get a sense of the network's exponential expansion from the charts below.

The Lightning Network has had significant expansion, which is a true proxy for Bitcoin's adoption, which is mostly in the East and global South.

Visa can process 24,000 transactions per second, while Lightning can process 1 million. The network has been boosting its capacity, and on open channels it can currently handle about 4,000 BTC.

Major cryptocurrency exchange Kraken just integrated Lightning to its list of normal payment methods and published an intelligence report with some pretty intriguing information on Lightning acceptance and growth.

The Kraken Report claims "Since late 2020, the use of lightning has been increasing steadily, and in September 2021, when BTC became legal cash in El Salvador, it increased exponentially. Despite this, due to the large number of users in the Lightning ecosystem that employ private channels, public metrics do not accurately reflect the entire scope of Lightning use."

Regarding the expansion of the Lightning nodes (Figure 2), Kraken says "Additionally, the rise in the total number of Lightning nodes suggests that a large number of new users are starting to join the network. From 2018 until the end of August 2020, nodes increased continuously, going from 54 to 6,134. But since then, node growth has become parabolic, increasing by more than 176 percent to 16,940 nodes as of this writing. There are currently about 1,000 more Lightning nodes than Bitcoin nodes due to the rapid growth of the Lightning node network. If usage keeps increasing at this rate, the Lightning network may be able to realize Bitcoin's promise as a medium of exchange asset, a crucial component of a global payment system that has hitherto prevented BTC from becoming widely accepted."

El Salvador has been paving the way for the adoption of Bitcoin among poor nations. I accept that President Bukele has made a "revolutionary" step that is historically significant for a nation-state, despite the fact that I have been and continue to be critical of the risky strategy employed by the nation. Therefore, El Salvador's success is crucial to the adoption of Bitcoin in underdeveloped nations in the future. The outcomes for El Salvador thus far are positive.

President Bukele claims that a sizable section of the previously unbanked people may now conduct financial transactions using bitcoin in this interview. "If it works, why wouldn't any other country want to do the same thing?" asked President Bukele. Imagine a nation with a 75% unbanked population, like El Salvador. Imagine if that percentage drops to 10% in a year. We've been attempting to bank our people for, oh, 30 years, but it's been impossible because they don't trust banks, the banks don't want to serve them, the services are too expensive, or anything else.

But more importantly, direct remittances from expats overseas will save Salvadoran citizens more than $400 million year in costs. Over 2.5% of the nation's GDP is represented by this (GDP). This played a significant role in the choice to adopt Bitcoin. And this number will only rise as a result of the near-zero cost of remittances made through intermediaries, which is currently between 5 and over 20 percent. In order to lessen the impact of the costs, if you are a Salvadoran expatriate and you currently strive to limit remittances, you pool them in the biggest transactions. You might send even a tiny amount anytime you have the opportunity if you currently have virtually $0 fees when utilizing bitcoin via the Lightning channel.

Undoubtedly, a lot of developing nations are planning to replicate El Salvador's success by studying its experience.

The best form of money to date has been Bitcoin.

While an unrestrained fiat money standard has only been an anomaly in the last 50 years, sound money has dominated human monetary history. Even though the focus of this post isn't on the history of sound money versus fiat money, I still need to make a crucial point.

Technology has mostly been the problem with money. Technology has always controlled the shift from a less advanced form of money to a more advanced one. Consider how ancient Greece's development of coinage and standardized weight allowed for the move from basic forms of money to gold and silver (for a thorough history of money, read Dr. Saifedean Ammous' "The Bitcoin Standard"). Because gold could not be transported over space and time at the same rate as information and trade as new technologies emerged, it was fundamentally abandoned as a form of money.The banking industry was initially founded to take advantage of the opportunity presented by technology advancements by replacing gold's inconvenient circulation with convenient paper "IOUs" fully backed by gold reserves maintained at the bank. The next step was to switch to a fractional reserve system that was partially backed by gold. After enough trust had been established in the fractional fiat system, the fractional reserve asset was conveniently abandoned to put in place an unbacked fiat currency system that was only based on paper claims. This provided the "elites" with the wealth and privileges made possible by the Cantillon effect, a five-decade trick that is, in some way or another, coming to an end.

Therefore, gold became outmoded and unworkable as a bearer asset for financial/business transactions in modern times due to technological advancement and the laws of physics. Only as a reserve asset could gold be used. This was the real cause of its downfall both as a bearer settlement asset and afterwards as a fully demonetized asset.

The ground-breaking technology behind bitcoin dramatically alters this paradigm.

Nowadays, there is no longer a chance to take advantage of the fact that soft or unsound money moves more quickly than hard money in financial transactions by giving time and space arbitrage. It is filled by bitcoin.

Bitcoin has several advantages over fiat money today, including the capacity to travel faster, higher security, ultimate immutability, and absolute scarcity when used as a bearer settlement asset.

Bitcoin is therefore a more advanced kind of money than anything humanity has ever used before, technologically speaking. Nothing, period, even 12 years after its inception, ever comes close to Bitcoin.

While it's still impossible to predict how adoption and monetization will develop in the future because there are too many unknowns, Bitcoin is available for usage and experimentation by anybody, and there's no way to put the genie back in the bottle.