Bitcoin is back to all time high. Four times it has crashed over 80%, yet every four years it makes another all time high.
Thankfully there is no social media trend of laser eyes, nor anybody calling me to ask about some doge or shiba! Those are still down over 80% though.
Every bull run will attract people hoping to make some quick gains. They will bid up the price aggressively, attracting more like them raising the price even further. Eventually too much leverage will build up causing yet another Bitcoin crash!
But every cycle, more people will take note of its resilience and long term gains. It is volatile, yet it is one of least risky asset as there is very low chance of permanent loss or even a loss lasting more than four years. More such people will start accumulating bitcoin using their income every now and then. Bitcoin being a finite asset with more people accumulating creates strong support for the price and ensures the eventual bottom is still many times higher than the previous bear market lows.
Bitcoin’s value comes from people using it to save their earnings. They use it because of its resilience and returns over long term while the price rise is then driven by more people using it for savings. This circularity is also a characteristic of ponzi schemes but what differentiates Bitcoin is its truly limited supply. There is no authority in control of Bitcoin, nor is it easy or profitable to take control by design, so it is now almost impossible to change its supply. That is also why 99% crypto don’t last beyond one bull run because almost all of them still have someone in control. Thus they meet all the characteristics of ponzi. Interestingly, fiat also has a central authority which can adjust its supply as they see fit. Compared to Bitcoin, Dollar is more like a ponzi than a store of value.
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