Jeff Fawkes is a seasoned investment professional and a crypto analyst. He has a dual degree in Business Administration and Creative Writing and is passionate when it comes to how technology impacts our society.
Peter Brandt, Bitcoin Halving and Coronavirus: is a famous trader and Bitcoin bear right about price fall? No matter what, he wants to convince you that Bitcoin is set to collapse. Recently, he said that Bitcoin can dive under $1,000, and here are some of his new thoughts.
Peter Brandt broke forth into a series of hot Twitter posts, claiming that the Bitcoin halving, coming in 55 days, is irrelevant. He claims that the real Bitcoin‘s supply is its daily trading volume. So, the reduction of the generation of new Bitcoins daily is equivalent to 2/100 of 1% of the ‘whole Bitcoin monetary supply’.
Brandt notes that the reduction of the money supply is a tiny fraction compared to what Bitcoin already has on the market, and halving is overpriced.
Peter Brandt Make Mistakes in Crypto Calculations?
Several Twitter users think he’s not right. One of them posts a reply in which he claims that Bitcoin’s daily trading volume is not the monetary supply. If we follow the logic by Peter Brandt, then two men could buy and sell 1 BTC to each other 21 million times a day, thus like ‘obtaining’ the whole monetary supply of Bitcoin. In reality, this would not be the case, of course.
Looking at trading volume as a measure for supply is wrong. If I and a friend buy and sell 1 btc back and forth 21M times are we in fact holding the entire supply of 21M btc?
— R0b5ter (@R0bster1) March 17, 2020
Such logic seems like the good old Bitcoin classics. Miner would sell less, people would buy more, the price would skyrocket.
Twitter Commentators Avoid Personal Factor in Calculations
However, this gentleman is forgetting that miners can’t choose between selling and keeping Bitcoin. It’s the market conditions making them do this or that. In extreme conditions of survival, miners will sell the asset when they have to when their wives demand that. Successful men don’t waste time arguing with the wife’s will. That’s why miners will sell Bitcoin even if they lose 50% or even 70%.
Coronavirus panic makes people spend. Having to chose between dying of virus and saving Bitcoin? Surely, people will pick life. Considering that they have a lot of coins mined before the halving, only God knows how many months they could sell that stash for the old price. Mike Novogratz, CEO of Galaxy Digital investment fund, stated:
“Bitcoin was always a confidence game. All crypto is. And it appears global confidence in just about anything has evaporated.”
Market Goes Red as the Biggest Countries Lose Numbers
Indeed, the Dow index falls like in the crisis of 80-s and 00-s. S&P 500 shows similar dynamics. Many of the stocks are falling, except for the stocks of medical corporations. People demand supplies, food, medical services, and they temporarily forgot about cryptocurrency and industrial stocks.
After a few moves by the Fed, including a hilarious $700 billion quantitative easing and saving the banks again, the situation got only worse. It is known that many of the American managers decided to move their production plants to China since 1980-s. Over the last few decades, the U.S. generates ideas and invent useful tech, send the blueprints to China and they do the stuff. Now, who will produce all the goods?
During the virus outbreak, the planet realizes that the ‘glorious’ U.S. economy was substantially based on the ‘communists’ from the wise East. Of course, China is not the classic communist country with a scary USSR-style regime. But it is a powerful mix of western business culture and carefully selected socialist ideas, resulting in what we see as the second world economy. Now, the balance of powers is shifting again, and the U.S. and China are the two biggest losers in terms of economic impact.