“Can a bunch of computers that are set up by a bunch of smart people do a better job [than central banks] of managing the vagaries of the world’s money supply?”
That’s the question former US Senator Judd Gregg (R-NH) grappled with in an op-ed published this week by The Hill.
Conventional wisdom says no, Gregg wrote, as it would “defy the logic of time and history” for Bitcoinor another cryptocurrency to challenge national currencies — and the central banks that manage them — for dominance in the marketplace.
Indeed, economists have even referred to the lack of a central bank to manage the money supply as Bitcoin’s “fatal flaw.”
However, Gregg, who served as chairman and ranking member of Senate Budget Committee, suggested that in this case, the “old-school view” may not be correct.
“If people accept that Bitcoin or any of its descendants have value — and if that acceptance becomes the bedrock faith underpinning the marketplace — then it will herald a new era,” he wrote. “The implications of the legitimization of Bitcoin as a currency are truly staggering.”
Central banks, he said, would be “neutered,” as they would be unable to directly manage inflation in domestic economies.
Federal governments, meanwhile, would have a much more difficult selling their debt, making it less practical to run up large deficits.
What has been called “hyperbitcoinization” would happen first in countries with weak economies and a poor history of currency management, while strong currencies like the US dollar would likely “stand as a core element of world commerce” for at least as long as the government operates in a “marginally responsible” fiscal manner.
“But it is also possible to foresee, not too far over the horizon, a world economic structure where currencies like the dollar, the euro and the yen will be challenged by crypto-currencies that obtain generally accepted status,” Gregg adds, noting that it would lead to a “very disruptive” — potentially “traumatic” — phase of monetary history.
This may be true, but as Gregg wrote, the world’s major currencies are almost certain to retain their predominance as long as central banks and national governments behave with at least a modicum of responsibility.
When they cease to behave responsibly is when hyperbitcoinization has the best chance of coming to fruition. This will likely prove to be traumatic and disruptive. However, if federal governments and central banks have left the world economy in such a poor state that their citizens turn flee to Bitcoin or other cryptocurrencies en masse, one imagines that Bitcoin will not be the harbinger of trauma but rather the response to it.
This is why author and scholar Nassim Nicholas Taleb has said that while Bitcoin may or may not be more convenient to use than other payment systems, it is an “insurance policy” against government mismanagement.
Bitcoin’s “mere existence is an insurance policy that will remind governments that the last object establishment could control, namely, the currency, is no longer their monopoly,” Taleb concluded in a recent blog post. “This gives us, the crowd, an insurance policy against an Orwellian future.”
Bitcoin price prediction: BTC/USD stuck between strong levels of support and resistance – Confluence Detector
- BTC/USD went down slightly from $8,811.45 to $8,750.50 this Wednesday.
- BTC/USD has three healthy resistance levels on the upside at $8,800, $8,990 and $9,000.
After suffering a slightly bearish Wednesday, wherein it fell from $8,811.45 to $8,750.50, BTC/USD has had a bullish start to this Thursday and is currently priced at $8,768.85. Since the price is sandwiched between strong resistance and support levels, further growth might be hampered. On the upside, there are three healthy resistance levels at $8,800, $8,990 and $9,000. While on the downside, healthy support levels lie at $8,755 and $8,530.
BTC/USD Confluence Detector
Looking at the resistance levels – $8.800 has the one-hour Previous High, 4-hour Bollinger Band middle curve, 15-min Bollinger Band upper curve, one-hour Bollinger Band upper curve, one-day Fibonacci 61.8% retracement level and 100-day Simple Moving Average (SMA 100), while $8,990 has no confluence detected. $9,000 has the 4-hour Bollinger Band upper curve and SMA 10.
On the downside, $8,755 has the SMA 5, SMA 10, SMA 50, SMA 100, SMA 200 and one-hour Bollinger Band middle curve. Finally, $8,530 has the one-month Fibonacci 61.8 retracement level.
Bitcoin to soon be accepted at 65,000 Swiss Retailers
- 65,000 Swiss Retailers will be able to soon start accepting Bitcoin.
- The new development comes on the back of a partnership between Bitcoin Suisse and Worldline.
It is reported that a new system will be available for the 65,000 Swiss merchants currently using Wordline’s nationwide payments infrastructure, dubbed SIX Payment Services.
65,000 Swiss retailers will shortly be able to start accepting Bitcoin as a means of payment. It comes following a partnership announcement between the Swiss broker Bitcoin Suisse and the European payment and transaction services provider Worldline.
It is reported that local publication Switzerland Global Enterprise has announced that both companies have signed a letter of intent. It covers ground that they promise to offer Swiss traders and consumers the possibility of paying with BTC. In terms of the partnership, it will be allowing the country’s 65,000 retailers who already use Wordline’s infrastructure to accept Bitcoin payments.
Bitcoin technical analysis: BTC/USD price is consolidating outside of bullish flag
- 2Bitcoin price is trading in positive territory, up some 0.50% in the second half of the session.
- BTC/USD price action is within consolidation mode, failing to attract commitment.
- The bulls must again breakdown and hold above the $9000 price mark for greater upside.
BTC/USD weekly chart
The price is sitting just on top of a breached weekly flag structure.
BTC/USD daily chart
Daily price action is also moving within a bullish flag, subject to a potential breakout higher.
Spot rate: 8,771.49
Relative change: +0.50%