The Macro Brief: Number Go Down Technology? Bitcoin Struggles As Liquidity Fades
Where Macro Meet Markets
“NUMBER GO UP, ME COULD HAVE HAD BIG NUMBER, GOON BAD” - Blade Runner, April 2017.
The above quote is one of the first “number go up” references in regards to bitcoin and has since become the pretense to memes and failed hodl strategy.
The “number go up” meme relates to this idea that simply all you have to do is buy, then buy on every dip, and hodl because “number (proce) go up.”
I suppose to look less childish, an ideology has formed around such. “Number go up” technology is an idea that surrounds bitcoin’s difficulty of adjustment fuction and the fact that only 21M will ever be in existence.
Because of bitcoin's scarcity and illiquidy, when money flows into bitcoin - and broadly crypto - prices can rise exponentially. Look, that’s great. But let’s be honest with each other, bitcoin acts like a microcap biotechnology.
Another point of the “number go up” technology is this idea that it cannot fall victim to political pressures.
We all know that was not true. This idea that this would be possible is fascile.
Just last month, the Securities and Wxchange Commission (SEC) added to their crypto regulatory committee; and following the epic disaster of TerraLuna, and how it’s entrenched into the crypto - and bitcoin - ecosystem, we can expect future regulations.
Gary Gensler, head of the SEC, said that legislation on crypto could undermine the equity and mutual fund market which goes to show how entrenched this really is.
Following TerraLuna's collapse, and now Celsius’ near liquidation, we can expect more scrutiny from politicians and regulators.
Since bitcoin is labeled as a commodity in the U.S., it falls under the Commodity Futures Trading Commission (CFTC). Chair Ross Benham has stated that more regulation of cryptocurrency is needed, and it’s part of the CFTC's job to determine which crypto will fall under jurisdiction.
Furthermore, this scarcity factor of bitcoin is of its greatest flaws.
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