Last night the price of a Bitcoin soared to a new all time high of over $5,800. Given recent events, one can only wonder what’s coming next.
Several weeks ago Bitcoin was on the cusp of $5,000. However the price tumbled following attempts by Chinese officials to shut down exchanges, and negative comments from JP Morgan CEO Jamie Dimon.
Yet last night the price broke through the $5,000 level and soared as high as $5,855. Which is astonishing in it’s own right. Although when seen in context of the current monetary and political environment, what’s happening is truly stunning.
On an almost daily basis there’s news of yet another nation or trade group creating non-dollar payment mechanisms. The most recent being Russia and China establishing, “a payment versus payment (PVP) system for Chinese yuan and Russian ruble transactions”.
This is following plans by China to pay for their oil with Yuan, which would then be convertible into gold.
So while many have forecast dollar problems for years or even decades, it appears as if some of the consequences have finally arrived.
Of course if a true capital flight from the dollar has commenced, that money would have to go somewhere. If China is essentially paying for its oil in gold instead of dollars, the precious metals would be one naturally beneficiary.
However a lot of that money is also going into the crypto space, as evidenced by the recent price action.
Jeff Berwick of The Dollar Vigilante mentions that, “there are currently only about 14 million bitcoin wallets in existence. If every one of them is owned by a solitary individual then that means 0.2% of the world’s population owns bitcoin currently.”
So if you believe that Bitcoin and the cryptos do represent a big part of our technological future, it’s fascinating to think where the market could be headed.