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In this video, I discuss whether Bitcoin’s price is being suppressed by Bitcoin futures and other market manipulation like gold has been subject to.
Gold used to be a good hedge against monetary debasement, but it has not kept up over the past decade– probably due to central bank price suppression.
But even GATA (The Gold Anti-Trust Action Committee) admits that it is impossible to suppress the price of gold using only gold futures and other derivatives. GATA maintains that price suppression only works if you are also able to bombard the gold market with sales of actual physical gold at opportune times to stop its momentum.
Central banks and government institutions do not have warehouses full of real Bitcoin that they can use to suppress the price. It helps that Bitcoin is much less prone to centralization than gold, given Bitcoin’s more flexible qualities.
Even the introduction of exchange-traded Bitcoin futures in December 2017 was not sufficient to keep the price of Bitcoin from hitting new all-time highs over the past 4 years.
If one central bank tries to suppress the price of Bitcoin, it makes it easier for other central banks and investors to buy up more real Bitcoin at attractive prices. Any institution that is short Bitcoin futures in this environment is vulnerable to massive short squeezes, like the kind we saw with GameStop earlier this year.
Game theory suggests that it is actually much better to be the first central bank to buy Bitcoin, rather than the first one to short it.
Even if Bitcoin ends up getting capped at a $10 trillion market cap like gold, it implies a terminal price of $500,000 per Bitcoin, which is 10x Bitcoin’s price today.
Not investment advice! Consult a financial advisor.
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