One of the most well-known Twitter analysts and Bitcoin enthusiasts, PlanB, has set out last week to the Thesis that Bitcoin is a new wave of Adoption is imminent. The reason for this is not, however, as many might suspect – in a Bitcoin price rise, but rather in the weakness of Fiat currencies. Specifically, he sees the monetary policy and negative interest rates as a driver.
Contents
Bitcoin: Mainstream Adoption is irrelevant?
In a Tweet from the 10. October declared “the author of the Stock-Flow model” that the next Bitcoin Use Case in the Form of Arbitrage Trading. In his opinion, one should leave the Bitcoin Mainstream Adoption to get of no great value. The next big thing to be Fiat-BTC Carry Trades.(Note: as the Carry Trade is a speculative strategy in the case of receiving a credit in a currency with low interest rates (Fiat) and it is in a currency with higher interest rate/yield changen (BTC) applies. In contrast to Arbitrage Trades, which are generally risk-free, are Carry subject-Trades will be without risk.)
The Bitcoin Mainstream Adoption forget. Fiat-BTC Carry Trades are the next step in Bitcoin’s growth.
The original tweet you can see here in the Following:
Forget about #bitcoin mainstream adopotion Fiat-Btc carry trade is the next step in bitcoin’s growth. Borrow fiat against a negative interest rate at -0.5%, buy bitcoin and future sell against +12% annualized. Rinse and repeat. Alternative: writing call options #arbitrage #blackhole— Plan₿ (@100trillionUSD) October 10, 2019
PlanB is of the opinion that we will see in the next 8-9 months until the Halving in may 2020 no significant movements in the Bitcoin price. Rather, he assumes a largely ‘flat’ Performance.
Bitcoin growth through negative interest rates?
Normally, the enormous Bitcoin exchange rate movements for a new wave of users are it, because the price movements goes hand in hand with the media interest and, therefore, the consciousness of the ‘masses’ is on the rise. So if we are going to see any big price movements, the new wave of users by something else. And it is precisely here, PlanB sees the current economic Situation as a driver. Because negative interest rates, the need to pay savers to Store their money in the Bank, will generate new Profit opportunities, so PlanB.
Rent Fiat money for a negative rate of -0.5% p. a., buying Bitcoin and selling it in the future for a return of 12%.
Bitcoin Carry trade as a new Profit opportunity?
One such investment strategy is, of course, an enormous contrast to the existing Arbitrage-Trading opportunities in the Crypto market. It is to be understood that the PlanB-called strategy is in contrast to the “real” Arbitrage Trading without risk, but a risk is subject to. In the case of “real” Arbitrage Trading namely rate differences between the various Exchanges can be exploited to generate risk-free profits.Even if the probability for more Bitcoin price increases – particularly in view of the upcoming Halvings is very high, is subject to an investment with borrowed capital is always a high risk. Because you are speculating with money that doesn’t belong to one!Nexo – Better than any Bank account, you do not sell your Kryprowährung. You keep it and get an immediate line of credit with a local Bank transfer from Nexo. Earn up to 8% interest on your Stablecoins, EUR, USD & GBP. 100 million USD of insurance on managed Assets. Start now!
PlanB in the criticism of 0.5% interest rates apply for consumers
The PlanB proposed strategy impact (as expected) on some of the criticism. Thus, the negative interest rates apply in the amount of -0.5% interest rates for the deposits of (Large)banks with Central banks, and not for Deposit of personal assets with banks, said a Twitter User. Furthermore, the strategy was speculative, and a “Pump” based investment strategy is not a sound strategy, so a different User. In addition, the purchases on credit and related speculation could lead to a payment default, said another User.Is Bitcoin a new wave of Adoption due to negative interest rates, and thus new Trading opportunities? What do you think about the Investment strategy of PlanB? A Chance or a risk? Come in to our Telegram Chat and talk with the experts and the Community. Subscribe to our News channel to not miss any News. (Image Source: Shutterstock)