The quantity of money and its velocity of circulation
January 4, 2021Are You A User, Or Are You A Loser
January 4, 2021
Even long-time Bitcoin investors have not yet experienced such a situation. The Bitcoin price climbs to a new all-time high every day. The last record was taken this morning at 8 a.m. when the Bitcoin price broke the 34,000 US dollar mark. Measured against the current rate of price increase, it is impossible to estimate where the price will end up in the next few hours. The first side effects of the historic Bitcoin rally are not long in coming.Yesterday morning the Bitcoin price was still below $ 30,000. Just one day later, we are targeting the US $ 35,000 mark with currently US $ 34,500. When looking at the annual chart, the increase in the Bitcoin rate looks more and more like an exponential function.With this huge surge, it is important to realize that it means an increase in Bitcoin market capitalization of around $ 100 billion. Overnight, the GDP of a small state was added to the market capitalization of Bitcoin.Such a sharp increase in the Bitcoin price always puts a strain on the ecosystem. Even during the crypto hype at the end of 2017, crypto exchanges, among other things, came up against their load capacities and there were failures. Although the ecosystem of service providers has developed and improved significantly since then, current crypto service providers seem to be faced with the first failures.As already explained yesterday by the Bitcoin Fear and Greed Index, the sentiment reached also a record high for greed. The mood is maximally heated. From historical experience a warning signal for every investor that the probability of a correction increases.The fear of missing out on something (FOMO — Fear of Missing out) is now spreading not only among private investors but also among institutional investors. There is a real build-up of both groups…
