Invariably, as bitcoin spikes and defies gravity, either up or down, the attention of institutional investors, central bankers and prominent financiers is suddenly awaken. Always then, I write something to debunk the all too common flawed narrative and misunderstandings. Whether it was or , their comments simply indicate ignorance of what Bitcoin is and what it stands for (please take note of the capital B because they do not). Warren Buffet before Ray Dalio One would suggest investing a couple of highly entertaining and educating hours to watch these two excellent award winning movies filmed by fellow , and . Untitled-Inc Torsten Hoffman Bitcoin the end of money as we know it the Film Cryptopia Now, a few days ago another famed investor, . Stan Druckenmiller, has disclosed that he also holds BTC Druckenmiller follows other prominent Wall Streeters like Bill Miller, Paul Tudor Jones, Michael Novogratz, Microstrategy´s CEO Michael Saylor and so on. Druckenmiller showed an instinctive grasp of what is driving the bitcoin price, at least in the medium-short term. He has pointed out that BTC “ .” He said also “ .” has a lot of attraction as a store of value to both millennials and the new West Coast money and, as you know, they have a lot of it if the gold bet works, the bitcoin bet will probably work better because it’s thinner, more illiquid and has a lot more beta to it Spot on. And hey, hallelujah, this brings even more awareness to cryptos, more institutional interest and we are all happier. Rather though, among the prominent — but (Bitcoin) ignorant — investor crowd, . Nothing new really — since it is mentioned from time to time — but still something worth considering and disputing once and for all. Ray Dalio recently said something worth noting Hey bitcoiners watch out because, according to Ray Dalio, sooner rather than later “ .” governments will “outlaw” bitcoin and other cryptocurrencies, should they start to become “material No more playing bankers without banks, fellas. No more “ ” fellas — to quote former US President Obama. holding your own private swiss bank account in your pocket Ray Dalio is one of the smartest investors around so, who knows, maybe he hopes that some cheap “terrrorism” will wash some weak hands out so he can do what his mates have done before him and buy some on the cheap. But for the sake of it let´s assume that he really means what he says. So my question to him would be: WHY then bitcoin should be banned? and HOW? and WHAT the practical effects of that ban would be? Let´s see. Why should bitcoin be banned? Lets first start with the WHY, because if we clarify that there is no real reason for governments to ever enforce a ban on bitcoin, then the HOW and the practical effects of such ban are just abstract thinking. I guess Mr Dalio thinks that BTC could eventually threaten the status of national fiat currencies or even the reserve status of the US dollar. Leaving aside the issue of when BTC becomes “material” — and consequently “dangerous” for governments — BTC should first of all become a “currency” in order to threaten other currencies. But BTC is not really a currency — or better put — it is also a currency among many other things, but only to a very, very small extent. Above all BTC will never be a currency the way the dollar or the euro are currencies. Fact is that there is no real need for BTC to become a currency. No need for bitcoin to scale adoption as a means of payment. Which, by the way, is the same mistake that bitcoin critics do when they mention bitcoin´s slow adoption path and scalability issues. The reason is that there is plenty of much better inflationary currencies out there to be used for paying the ice cream, the espresso or the daily grocery. I can call them SOLs, Store of Liabilities. are coming, they are the bright future of SOLs. Stable coins and digital fiat money in the form of fintech digital payment systems (such as the Chinese , Alipay, We Chat, etc.) are already here. CBDCs (digital Yuan, US Dollar, Euro) Ant Group All such digital currencies will be competing among themselves and against the US Dollar for reserve status. Indeed, China was the first country to issue its CBDC as a pre-emptive move to block other digital currencies from competing with the digital Yuan in their home market. They wanted to prevent local adoption of competing currencies such as private-corporate currencies like or a Euro or US Dollar CBDC. Certainly they were not at all concerned about BTC. Libra Bitcoin is not a threat to fiat currencies BTC remains therefore primarily a and . store of value (SOV) here´s the reason why It does not compete directly with any digital currencies. It is not a  threat to any of the major national currencies or to future CBDCs. BTC  competes — to a certain extent — only with gold. And I say “only to a certain extent” because (i) it possesses some peculiar qualities which make it— especially for the younger crowd and the not wealthy — a better alternative to gold, since its portability, resistance to coercion, scarcity and lack of storage costs are superior to that of gold, and (ii) gold will still be gold despite BTC especially for institutional investors and central banks. The two can easily co-exist for a long time, but in the long term the trend will be for BTC to as well as market share from global legacy financial services, asset management and insurance sectors. inevitably erode gold´s market share, So, let´s go back to the reason WHY governments should ban bitcoin. Frankly there are none. BTC is not a threat to the current financial system. We all know exactly what is the effect of monetary debasement. The loss of purchasing power of the US Dollar and the Euro is clearly visible to anyone who cares to look. In the above chart 50 years of monetary inflation at work: how many US$ you would need to buy one ounce of Gold since 1970. The chart is not updated but we are well over US$ 1.800 at the time of writing from US$ 36,56 in 1970. This is why investors rush to gold, silver, real estate, stocks, farmland, objects of art and of course to bitcoin. Will governments ban all of them together with bitcoin? Of course not. BTC as a store of value is no bigger threat to governments than gold, silver, or farmland are. The only difference is that bitcoin will be much harder for governments to confiscate than gold or silver are. If the scenario that Mr Dalio envisages is a general governmental clamp down on SOVs, then one should rather rush into bitcoin instead of gold exactly for its censorship resistant properties and its resilience. If you were a government would you rather tax real estates, confiscate gold bars held at easily identifiable banks and gold brokers or run around trying to figure out where people hide their strings of numbers and letters? Bitcoin is not a threat to the legacy financial system Now let me clarify something else quite important. When one mentions Bitcoin then (please again note the capital B), that´s not a currency, that´s not a SOV, that is programmable money. We are talking about a revolution which equals Gutenberg´s printing press. We are talking about an entirely new financial system which is parallel to and independent of the legacy financial system. Every bitcoin owner is “its own bank”. Andreas Antonopoulos once said “ ”. One could not miss the point more if thinking of Bitcoin as a currency for payments in the Western world, because Bitcoin is about everything else and everywhere else Indeed. Think about the millions of people who use it for remittances to their families in countries where access to banks is difficult. Think about countries where the use of BTC is booming because of hyperinflations, . such as Venezuela and Argentina There, Bitcoin is used to transfer a SOV P2P without any intermediation at virtually no cost. A practically unenforceable ban? Let´s see then HOW governments could practically enforce the theoretical ban on bitcoin. A national ban would serve no purpose. If China or could not effectively ban it, we cannot do it either. Then it has to be a globally coordinated worldwide ban. Highly unlikely. Venezuela And how can you enforce that ban? Short of shutting down all internet connections you won´t be able to enforce it. You should close all the gates between fiat currencies and cryptoexchanges. You should ban crypto-exchanges altogether. But then it is hard to imagine that in some geopolitically incoercible nation — perhaps somewhere in the eastern hemisphere — there won´t be someone setting up a crypto-exchange. And what about much less coercible decentralized P2P exchanges then? What about black markets? There is simply no way that governments can enforce that, not even in China police state. And even so, practically, what will be the effect of driving bitcoin underground? Its price will explode, the spreads in those countries will be huge compared to countries where it remains legal. Control is the issue for regulators rather than outright ban The true disregarded issue — which will oppose regulators on one side and cryptocurrencies and its developers on the other side — is the privacy and fungibility of cryptocurrencies. They want back-door access. This is where the fight is. . But also BTC is directly affected since without increased privacy also its fungibility might be compromised. Privacy coins like Monero are on the frontline of that But this is a much more complex issue which deserves to be dealt with separately. I will soon look into that topic in a new article. Conclusion If we look at the reality of it — the WHY and the HOW bitcoin could be banned — it is clear that it won´t happen. It will not be banned, just like the use of the printing presses could not be banned, despite the authorities tried to impose jail time to transgressors. Just like cars and combustion engines could not be banned, despite the authorities tried to slow down its adoption with burdensome and deterring regulations. The cat has been out of the bag 12 years now. There´s no way of putting it back in. The technology clock cannot be turned back. ************************************************************ Below you will find a chronological review of my old bitcoin articles and relative price levels at the time of publication. : I have gone back to 2018 when BTC price was US$ 3.100. Enjoy the +500% ride Nov 9, 2018 I wrote “…This could possibly cause the crypto market to drop lower before it can start trading higher” — On 14 nov BTC starts dropping to its lowest of $ 3.100 since Sept 2017 — BIG BUYING OPPORTUNITY https://medium.com/@andreabianconi/the-latest-on-security-tokens-from-zurich-s-cryptosummit-5e740ac5439b May 24, 2019 I wrote: “…and this will be inevitably reflected also in the appreciation of BTC and all correlated cryptos. This process is ongoing and it is irreversible”. BTC Price $ 7.500 https://medium.com/the-capital/the-fundamental-reasons-to-be-bullish-on-bitcoin-and-the-crypto-sector-2024d8bc8395 Juli 25, 2019 I wrote: “…Finally, if institutional investors, family offices, HNWI and UHNWI start allocating even only 1% of their portfolios to the crypto sector what will be the impact on the price of bitcoin?” BTC Price $ 9.800 https://medium.com/@andreabianconi/oops-ray-dalio-missed-the-biggest-of-all-paradigm-shifts-crypto-79ce826c1445 August 22, 2019 I wrote: “…But regardless of the timing, the macroeconomic fundamentals highlighted above are the most powerful catalyst that will drive the big money towards precious metals and crypto in the foreseeable future.” BTC Price $ 10.100 https://medium.com/the-capital/follow-the-money-buy-bitcoin-and-gold-5c28703d8adf March 24, 2020 I wrote “…While the S&P 500 loses 3% though, BTC/USD is up 10%, and gold/USD up 3,6%. This might mean that weak hands have been shaken out, and hodlers/bulls are back in control” BTC Price $ 6.700 https://medium.com/the-capital/covid-19-and-the-effects-of-the-monetary-tsunami-on-bitcoin-and-gold-a3fb4d14e97f May 17, 2020 I wrote: “…Here you go, a rational bet and asymmetric returns make it possible to allocate just 1–2% of your wealth to crypto, and one day this might well become the largest portion of your wealth.” BTC Price $ 9.670 https://medium.com/the-capital/what-tudor-jones-bitcoin-investment-means-for-other-institutional-investors-and-for-bitcoin-f337a37eeb8d August 20, 2020 I wrote: “…Barred adverse technological developments or currently inconceivable problems at Bitcoin´s protocol level, the only rational question is how many times a multiple of today´s price its future price will be.” BTC Price $ 11.500. https://medium.com/@andreabianconi/bitcoin-goes-parabolic-and-its-not-the-price-c557f90a694a November 13, 2020. My thoughts at the time of writing. The price is $ 16.350 and it looks like we might have a short term top here. A pullback to $ 14.000 is very possible. To $ 12.000–13.000 will be an even better opportunity to add more for next leg up. #crypto #blockchain @thinkblocktank @untitled-inc #bitcoin #cbdc #digitalcurrencies #monero © — 2020 www.bianconiandrea.com ************************************************************** : The website and the information contained herein is for general guidance only and it does not constitute legal advice. As such, it should not be used as a substitute for consultation with lawyers on specific issues. All information in this paper is provided “as is”, with no guarantee of completeness, accuracy, timeliness or warranty of any kind, express or implied. Legal Disclaimer : The website and the information contained herein is not intended to be a source of advice or credit analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice. Investment Disclaimer © — 2020 www.bianconiandrea.com Also published . here

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Mr. Ray Dalio - "You're Wrong. Again." Bitcoin Will Never Get Banned. Here's Why

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Mr. Ray Dalio - "You're Wrong. Again." Bitcoin Will Never Get Banned. Here's Why

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