Since the crypto asset's peak ten months ago, the price of bitcoin has fallen 72.9% in USD. Bitcoin's recent trading volume is just below $19K per unit. Two prominent crypto market experts have been discussing ways governments could shorten bitcoin to suppress its markets. One of them however notes that there are only a 1% chance of it happening ."
"Enough Shorts in The System to Suppress the Price"
The price of Bitcoin has fallen this week after an initial drop following publication by the U.S. Consumer Price Index (CPI), last Tuesday, which revealed that inflation was higher than anticipated. The U.S. Federal Reserve could raise the benchmark bank rate, which could lead to a further decline in the crypto economy.
The Crypto Fear and Greed Index shows that sentiment has fallen from "fear" towards "extreme fear" in the past day. Willy Woo, a bitcoin analyst, posted a thread on Saturday about the possibility that unlimited fiat or derivatives markets could suppress bitcoin prices.
"A dummies' guide to selling 42,000,000 BTC" is a thread that discusses Arthur Hayes' creation of the first "BTC Casino that real people use, trading billions each day." Woo stated that Arthur "gloriously opened the door for us to sell 10 BTC even though we only had one BTC — We just need people who will take the other side."
Woo described how Hayes created Bitmex by himself, and Woo talked about how CME Group launched a BTC casino that allowed you to front USD.
Woo's tweet notes that Wall Street hedge funds love this. What are the limits to selling Bitcoin now? Unlimited. Fiat is unlimited." Woo explained that BTC has a market capitalization of $0.37 trillion, while the U.S. Dollar is approximately $22 trillion.
Woo stated that $1.1 trillion was added by the analyst during the past year.
BTC does not need to be destroyed. It just needs to have enough shorts to keep the price down. BTC can't make a global impact without a large market cap.
Taming Bitcoin
Woo isn’t the only one to talk about these matters. A number of crypto advocates have stated that BTC derivatives markets, and even exchange-traded fund (ETFs), could cause BTC’s value to drop. Investors were afraid of this fear long before CME Group introduced BTC Futures Markets in 2017.
A few years later, studies showed that institutional investors may have been manipulating bitcoin's prices. CME Group is exposed to many brokerage firms around the world and in August CME bitcoin futures swapped for the biggest discount to spot prices since 2017.
Leo Melamed, the CME Group chairman emeritus, stated that bitcoin was now a "new asset type" in November 2017. However, he also stressed that it was a "very important step in bitcoin's history". CME Group would "regulate and make bitcoin not wild, or wilder".
We will make it a regular trade instrument by following rules.
Alex Kruger: Shorting Bitcoin's price so people lose interest permanently has a low probability
Alex Kruger, a trader, economist and entrepreneur, tweeted Saturday that "governments could easily stop bitcoin." Kruger added how possible it was. It's easy to do. It's best to keep it below $10,000 for a while. Then, most people will lose interest forever. "No need to worry about 51% attacks." He also stated that his 2019 statement was a copy-and-paste of that exact statement. This means that there is a very low chance of such an event happening.
Kruger asked, "Can it happen?" Kruger asked. Is this possible? It seems possible.
Woo's thread on Twitter contained comments that suggested that the best thing to do was to remove BTC from spot markets exchanges. Cryptoquant.com data shows that approximately 2.3 million BTC are stored on centralized trading platforms as of the time this article was written.
Dr. Crypto Tony stated that "[Bitcoin] being at a low cost means more people are buying it [and] taking it off of exchanges." This makes BTC more costly. Because people have self-custody, they can't manipulate it as easily as silver [and] Gold. Finite BTC causes it to rise in value as more people buy and keep it individually. It can be taken off exchanges.
What do you think of the debate about shorting bitcoins and governments suppressing its price? Please comment below to let us know your thoughts on this topic.
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By: Jamie Redman
Title: Can Unlimited Fiat and Governments Suppress Bitcoin’s Price? 2 Analysts Discuss the Theory and Odds
Sourced From: news.bitcoin.com/can-unlimited-fiat-and-governments-suppress-bitcoins-price-2-analysts-discuss-the-theory-and-odds/
Published Date: Mon, 19 Sep 2022 14:00:26 +0000
