Industry analysts and researchers have noted that the narrative for buying safe haven assets such as Bitcoin or gold will only strengthen as cash and bonds are earning near-zero yields.
Bitcoin prices reclaimed their record high of just over $24,000 a few hours ago indicating that the rally has yet to run out of steam.
At the time of writing, there had been a minor pullback but a move back to $24k is already occurring according to Tradingview.com. The momentum is still strong as there are few sellers at the moment.
Co-founder of 10T Holdings and global macro investor, Dan Tapiero, observed that there are around $190 trillion in bonds or cash which are essentially yielding near-zero with almost no hope of any appreciation.
This shortage of financial stores of value in the legacy system could lead to panic buying in gold and Bitcoin, he added;
$190 trillion in bonds or cash essentially yielding near 0 with almost no hope of any appreciation.
Shortage of financial stores of value in the legacy system leads to panic buying in gold and #BTC.
Fastest ???? gets faster. pic.twitter.com/8gXCygVewm
— Dan Tapiero (@DTAPCAP) December 21, 2020
A massive surge in national debts and central banks scrambling to debase their currencies and reduce their debt mountains by printing trillions will only exacerbate this narrative over time.
When shown a long term gold inflation chart by Global Macro Investor and Real Vision Group CEO, Raoul Pal, he added;
“Imagine how high btc is going to go if gold looks this good. Large institutional portfolios way underweight and will need it.”
The Musk Effect
Tesla CEO Elon Musk has made a number of bullish tweets on Bitcoin over the weekend prompting industry observers to ponder on the premise of the tech giant making a big investment.
Even Reuters ran a story on it, stating that …
“Elon Musk on Sunday asked about the possibility of converting ‘large transactions’ of Tesla Inc’s balance sheet into bitcoin,”
Aside from the now widely circulated meme and the ‘Bitcoin is my safe word’ comment, Musk also reportedly had a dialogue with Michael Saylor, chief executive officer of MicroStrategy Inc.
“If you want to do your shareholders a $100 billion favor, convert the $TSLA balance sheet from USD to BTC. Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor.”
Saylor tweeted to which Musk replied;
“Are such large transactions even possible?”
And The Losers Would be …
If the likes of Tesla and other huge players did get into Bitcoin, it would be massive for them, and anyone currently holding it or buying it even at ATH prices.
Those losing out are likely to be the naysayers and serial detractors such as Peter Schiff and Nouriel Roubini, and of course, central banks as their own assets continue to devalue by the day and the world runs short of safe havens.