A new global civil war is breaking out in 2018 between institutional fiat money and cryptocurrencies such as BitCoin. It is sure to create some major market gyrations through conflict that will make some major winners and losers in the year ahead.
At this stage of “the war”, the combatants are not in very clear lines of conflict. Many major “leaders” on both sides of the institutional vs non-institutional money game are trying to play both sides. You have major bankers coming out claiming that cryptos are “Ponzi” schemes or bubbles while the same day taking major financial positions in cryptos. You also have some long-term crypto marketers trying to take positions back in fiats or institutional banking investments out of their profits.
While we can understand the desire for diversification and capturing profits from the high flying cryptos, we deem it fool-hearty, in the long run, to move back into archaic, failing systems of third-party banking and doomed paper currencies. It would be better to bank real estate or physical commodities than submit back to the other side of the money divide where tax and inflation doth corrupt.
The war of money will heat up this year with various governments and states within countries trying to tax cryptocurrencies…which are not a currency. As usual, these politicos at all levels have little understanding of why the global masses are flocking to unregulated, new value investments and slowly but surely giving up their dependence on centralized forms of banking and payment exchange. All politicos know how to do is try and pass “laws” that forbid citizens to bypass their systems built on onerous taxation and inflation of their old currencies. When they say “control”, they really mean to “kill” freedom of markets, privacy, and personal sovereignty.
Surely we understand their panic as their political promises already way outstrip their abilities to pay those obligations from taxpayer coffers. The “people” no longer trust the global monetary system and are making out very well in black markets and cryptos. Meanwhile, the new institutional money has tried to form crypto ETFs and “futures” funds to attempt shorting and controlling crypto values from the market side. This has had mixed results so far.
We see the current shakeout in crypto markets as a good thing. Much of the new money coming into BitCoin and other cryptos have been looking for the “get rich” scheme. They have little or no understanding of the technologies and future applications that are coming for cryptos. If they did, they would get in and never get out. Instead, we have billions of “silly money” invested in BitCoin and others for the wrong reasons. Once this gets weeded out by deflating valuations, the real big money, much of it institutional, will flood in and lift the prices back to new highs.
Make no doubt about it. The new digital currencies are here to stay. Fortunes will be won and lost by speculators, but those who understand and stay with the fundamentals will continue to grow their wealth via the new Blockchain money system on a global basis.