CONTRARIAN
CRYPTONOMOMICS
An Introduction
When a buyer and a seller exchange goods or services, value is defined and commerce is created. Once value is determined, the transaction or "contract" is completed.
What is used for legal tender has changed over the years. Rome was the first civilization to create the basic monetary unit. Gold, silver, and bronze coins were use as its currency. Nummus Aureus — gold money. 1 Denaril = 25 silver Denaril = 10 bronze asses.
The Civil War and the creation of the U.S. Dollar
The social issues leading up to the Civil War were very similar to today's. Territorial conflicts, political conflicts, federal vs. state conflict, social vs. moral conflicts, freedoms and liberties as they relate to the U.S. Constitution.
Before the Civil War started, America used gold and silver coins as it's official currency. With the onset of the Civil War, the government was desperate for money to finance the war. So in July 17, 1861, they passed the “Act of July 17, 1861", permitting the Treasury Department to print and circulate paper money backed by gold reserves held by the Treasury. Paper currency in the form of banknotes were issued by privately owned banks and the notes were redeemable at the bank's office.
The gold standerd was dropped by the United Kingdom in 1931. The U.S. Treasury dropped it in 1973.
Since 1973, the U.S. Dollar is backed by the full and faith and credit of the United States Treasury. The U.S. Dollar was established as the worlds foremost currency by the Bretton Woods Agreement of 1944. It claimed the top spot from Britain’s Pound Sterling. England printed massive amounts of Sterling to finance two world wars, and President Truman’s administration worked with Europe to passed The Marshall Plan which helped rebuild Europe.
Today, the U.S. Dollar remains the world currency of choice. For the last 23 years global trade worked because of legislation like NAFTA. Global countries worked together for the benefit of both. Post Covid, the landscape has changed. Wars and conflicts over territories, genocide, and enslaving women's reproduction rights has lead to the remapping of global trading partners. Countries are implementing monetary policies that reduce the need for the U.S. dollar as legal tender.
Bitcoin is the next evolution in legal tender.
Bitcoin is the new monetary unit.
Welcome to Cryptonomics.
The genesis block of Bitcoin — mined in January 2009 — was the starting point of what would become a financial revolution. The creator was Satoshi Nakamoto — his real identity is still a mystery. No one really know for sure — who created Bitcoin?
Every four years there is a halving, which reduces the block rewards in half. This year it drops to 3.125 BTC. This will occur on April 22, 2024. There is a limited supply of Bitcoin. 21 million coins is the maximum supply that will ever be produced. Currently there are 19.6 million in circulation. It is projected that Bitcoin's market cap can reach $20 trillion. The coin is projected to be valued at $258,500 in a bearish forecast and $682,000 in a bullish market by 2030.
On January 10, 2024, the S.E.C. approved eleven Bitcoin ETF (exchange traded funds). Of the eleven firms approved, Blackrock and Fidelity capture 80% of the Bitcoin ETF sales in the first three weeks of trading. Net inflows overall was in excess of $30 billion, "almost overnight". Blackrock and Fidelity are providing their clients the ability to hold Bitcoin in their portfolio. Bitcoin acts as a hedge against inflation. Bitcoin will not depreciated in value like the dollar-based assets.
What’s next?
There's a lot that goes into determining the value of an asset. Price discovery is just beginning for Bitcoin and the cryptocurrencies. If you enjoyed this content, please sign up for our next Cryptononics seminar by emailing bob@thecontrariancryptonomics.com or adding your name at the form below for more info.