Bitcoin Too Big to Die? Effect of "strategic reserves" on bear markets

[d5000]

You are one of the few bitcoiners that are skeptic about it going to over a million.

Just to clarify: I don't rule a $1M Bitcoin out. I think if there is a strong narrative that Bitcoin can be really a gold competitor, then this could trigger a bull market where the price more than doubles in a standard bull cycle. Imagine the gold price falling and Bitcoin rising to new ATHs at the same time, even if it's only for a couple of months. And in 2030+ that could bring us close to the million. But at the same time, I expect most bull cycles to be weaker (i.e. less than a x2 in four years, in purchasing power) due to the general volatility reduction tendency.

Thus I believe mining rewards would be stable or slightly declining in the long term trend, which hints to a stable or decreasing energy use. Not a stable hashrate, as the technical progress of ASIC hardware of course will still continue.

In addition I believe the quota of renewable energy will grow steadily. It's simply the cheapest source of energy that exists. And that also helps to counter the "climate killer" narrative.

I honestly wish that it wouldn't just keep rising, because of what i said it would create problems for anyone holding. And if it would crash too far down now, it would create whole another problem if those people would lose their savings on it.

That's why I think the next bear market could be an important milestone if we manage to significantly reduce the downward volatility. If falling knives become less scary, and more and more people switch from the "riding the bull waves" model to DCA or contrarian trading, that could be weakening the "Bitcoin can go to zero" narrative a lot

From volatility that used to be quite uncontrolled, perhaps today we already have volatility that is more programmed (artificial) because very powerful players hold about 10% of the max supply, which is no small thing (although it may seem that way to some).

Well the ETF companies are imo not a single entity as the legal owners are the ETF holders. (Micro)Strategy on the other side, as the biggest individual holder, is at 3-4%. So I'm not sure if there are now more "whales" with the power to really move the price than before.

I however think I agree with the "more controlled" volatility. I attribute that however to the fact that more professional players are now in Bitcoin, and (in comparison) less weak hands. Even retailers are learning, they use DCA more frequently now instead of the extremely cyclical behaviour of, let's say 2017.

I also think the "mysterious Internet thing" narrative is weakening too. I occasionally see it still, above all in comment sections of newspapers and similar platforms, but a few years ago (pre-pandemic) it was the prevailing narrative and now it's becoming a minority.

[abaeze]

The world economy is facing a change today. People in different countries of the world have started to accept that Bitcoin provides economic freedom and security and people around the world have started to welcome the adoption of Bitcoin, so it is the responsibility of the country's government to ensure the economic security of the common people. But if the country's government and the IMF cannot accept this change, then the main obstacle to the decentralized economy will be the government and the IMF. But now it seems that the picture is changing. Especially when corporations and governments have started to accept it. The government's own strategic Bitcoin reserve system is proof of that. When people see corporations and governments themselves keeping Bitcoin in reserve. This means that along with the common people, now various big companies and governments also want to invest in Bitcoin as an asset and hold Bitcoin, as a result, people will not believe so easily in the future - Bitcoin will die, and this is the basis for sustaining a new economy. However, the fact that there is a lot of research needed on the subject of "gold alternatives" and that there are many opinions is actually positive.

[alegotardo]

Ah... now the narrative has changed, hasn't it?

It isnt so much about the price of Bitcoin, its more about the costs necessary to kill this idea, if you understand me... if not, let me explain better: Now that we have companies strongly supporting Bitcoin, several ETF funds, and even governments with BTC as a "strategic" reserve, Bitcoin changes its political category... it's no longer a cypherpunk's toy but an asset of established interest.

Obviously, this doesn't mean that Bitcoin will grow forever, but it also can't be said that it will die like they did before, because then they would also have to explain what would happen to shareholders, taxpayers, and regulatory agencies asking: "Bitcoin is dead... but what about the balance sheet/treasury with BTC? What happens?"

Nowadays, the perception of risk has dropped significantly, panic no longer exists, although bear markets still exist... its a healthy volatility like any other financial market... it rises and falls, creating opportunities for those who know how to enter the market, but always with the certainty that it will continue to exist.

[0xSlayers]

Yes, some people will spread FUD for their own gain, while others simply dislike crypto and will do everything they can to create more FUD. On the other hand, those who truly understand Bitcoin will hold strong and not be shaken.

your government has a strategic Bitcoin reserve, could it then simply "die"?

That's an interesting perspective. I agree that liquidity isn't the biggest shift if governments and large corporations treat Bitcoin as a strategic reserve, it naturally becomes harder for the average person's to believe the 'Bitcoin is dead' headlines that used to dominate every bear market.

Is Bitcoin now "too big to die"? Could this accelerate the volatility reduction we're already witnessing, and finally pave the road to make it a more stable and "solid" asset, and a true gold competitor?

I think "too big to die" is a fair way to frame it. Even if volatility continues for a while, the psychological floor feels stronger because now Bitcoin embedded in balance sheets and, potentially, state level reserves. That kind of legitimacy could be what finally reduces the extreme boom and bust cycles over time.

[d5000]

It isnt so much about the price of Bitcoin, its more about the costs necessary to kill this idea [...] would also have to explain what would happen to shareholders, taxpayers, and regulatory agencies asking: "Bitcoin is dead... but what about the balance sheet/treasury with BTC?

I agree with that. The more voters in certain countries having some kind of relation with any company (working there etc.) which holds or makes money with BTC, the more difficult it becomes for any goverment entity to justify an attack on Bitcoin. (While of course, attacks on Bitcoin's privacy/pseudonymous aspect are still "legit" for governments because they don't affect the market, at least not much.)

There has been however also the "FUD" version of that narrative: "Bitcoin will kill our economy because eventually it will crash and take treasury companies and finally banks into the grave! Let's at least not let it grow further!" If this narrative becomes dominant eventually, this could limit Bitcoin's growth again. But currently ... it simply doesn't look like that. Times look currently quite good for Bitcoin investors -- independently from the fact that we may be near a cycle top.

[STT]

If Dollar can die and people discuss it dying for decades now then I reckon they'll have plenty more to say on Bitcoin for many years yet.    Saying the opposite makes me more apprehensive then any criticism, saying its unsinkable is surely a bad omen we should have learnt that already by now.

[batang_bitcoin]

IIRC, most of the concern before was its high fees. But then, it scaled and was solved. Because people who criticized Bitcoin was always pushing for the fees that we've got before and even mocks that the fee is even more expensive than a cup of coffee. Now when that's been solved, they have found some other narratives to throw to Bitcoin. I wouldn't say that it's too big to die but, it's here to stay.

[WillyAp]

There has been however also the "FUD" version of that narrative: "Bitcoin will kill our economy because eventually it will crash and take treasury companies and finally banks into the grave! Let's at least not let it grow further!" If this narrative becomes dominant eventually, this could limit Bitcoin's growth again. But currently ... it simply doesn't look like that. Times look currently quite good for Bitcoin investors -- independently from the fact that we may be near a cycle top.

Those people don't get that states don't go bankrupt. They default.
The new $ will shine as bright as the 1st one. Actually the US is the among those countries who did not come up with different currencies like the new $.

some interesting data:
https://worldostats.com/country-stats/currencies-by-country/