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  • Whatever is happening with this thing called cryptocurrencies is insane.

  • It still feels like it's not real.

  • How much do you think bitcoins price was exactly a year agoless than 7K dollars.

  • Within a single year, the price skyrocketed to 60K dollars.

  • It's floating somewhere between 50 and 60K.

  • Just five years ago, in 2016, the price of the bitcoin was less than 450 dollars.

  • These kinds of moments push you to think twice about whether you are investing in the right

  • asset or not because a 10 or 20K investment in bitcoin would have turned you into a multi-millionaire

  • today.

  • You could have purchased a Ferrari and start making YouTube videos where you could say

  • - KNOWLEDGE!! - that suppose to be a joke )

  • It's very uncertain where crypto prices are headed now.

  • Honestly, at this point, I wouldn't be surprised if bitcoin crosses 100K dollars.

  • I remember back in 2017, everyone was freaked out about how on earth bitcoin worth 15 or

  • 18K dollars.

  • Little did they knew what 2021 have prepared for us.

  • If you're feeling bad for missing the opportunity to invest in bitcoin 5, 7, or eight years

  • ago, then let me introduce you to James How ells.

  • He is a software developer who was one of the few early users of bitcoin.

  • When mining bitcoin was super easy, he used to mine a lot from his bedroom using his personal

  • computer.

  • Now you can't since the network has grown so much that you need huge computer warehouses

  • to mine even a single bitcoin.

  • Back then, he mined over 7500 bitcoins from his little bedroom.

  • He believed in this idea but had no clue that his hard drive soon will worth a fortune.

  • Back then, bitcoin wasn't as exciting as today.

  • It was only used on the dark web to exchange illegal goods.

  • So when he was cleaning up his house, he thought that he had taken out all the information

  • from that hard drive, including his bitcoins, but he didn't so he ended up throwing that

  • hard disk with over 7500 bitcoins.

  • Somewhere in the world, there is a hard drive with access to a bitcoin wallet with 7500

  • bitcoins that worth over 427 million dollars.

  • This guy was sitting on a pile of virtual gold.

  • He threw away almost half a million dollars!

  • Just imagine for a moment how bad is he feeling!

  • He has spotted one in a lifetime opportunity.

  • He did everything he could to take advantage out of it and then threw it away in the garbage

  • with his own hands.

  • He is only going to feel worst as the price of bitcoin keeps rising.

  • But he is not the only one.

  • Stefan Thomas also has a wallet with over 7000 bitcoin, but he forgot his 12-word password.

  • Back in 2011, he produced an animated video explaining how digital currency works.

  • For his efforts, a bitcoin enthusiast awarded him 7,002 bitcoins.

  • And right now, he has a fortune of almost 400 million dollars that he cant access because

  • he doesn't remember his key.

  • Whenever you have a bad day, just remember these guys, i don't think you can mess up

  • more than what these guys did.

  • However, not everything is sunshine and rainbows when it comes to cryptocurrency because everything

  • that rises will eventually fall, whether it's cryptocurrencies, the stock market or real

  • estate, or any other assets.

  • We have already experienced one Cryptocurrency crash at the end of 2017, and it seems like

  • we might experience another one this year or in the foreseeable future.

  • Of course, it's impossible to predict anything because the future is unknown and whoever

  • claims to know the future is lying, but if we just take a look at the facts on the ground,

  • we might be able to make a reasonable prediction based on the current circumstances so let's

  • take a look at whether we are at the bring of another crypto crash.

  • In March 2020, the price of the bitcoin was a little over 5K dollars.

  • It already lost its momentum back, and experts predicted that it would slowly grow since

  • then.

  • To change the financial industry is almost impossible unless the government is backing

  • you.

  • But something unexpected happened around that time.

  • Suddenly the future became uncertain, a global pandemic stopped the world from turning around,

  • and we had absolutely no idea how on earth are we going to get out of it.

  • Investors panicked, sold their stocks, so the stock market dropped by over 30 percent

  • in less than a month.

  • They couldn't even invest in real estate because most people lost their jobs due to the pandemic,

  • and it seemed like they will not be able to pay their mortgages and the housing market

  • will collapse.

  • That's why they started buying gold because gold has always been the global currency of

  • the world, and no matter what happens, gold will always hold its value, so gold prices

  • rose instantly.

  • In a few months, they crossed a breaking record of almost 2100 dollars per ounce.

  • But something different was happening around the same time.

  • Cryptocurrencies, especially bitcoin has already developed a reputation of being virtual gold.

  • You might not be able to touch it, but there is a limited number of them, and it's backed

  • but this huge network across the globe.

  • So some investors turned to bitcoin to protect their wealth in such uncertain times, which

  • led bitcoin price to rise, and finally, in a long time, the price crossed 11K dollars.

  • But it wasn't just the price of the bitcoin that was rising so significantly but pretty

  • much every other asset.

  • The stock market was shooting through the roof; real estate prices grew by double digits.

  • What do you think happened?

  • The fed understood that if they are not going to act fast.

  • This pandemic could get much worst than the 2008 crash.

  • In 2008, it wasn't just the real estate market that collapsed, but rather it took down the

  • banks with it since banks provided mortgages to these homeowners.

  • On top of that, banks sold these mortgages in the form of securities to investors, so

  • when everything collapsed, it took down with it banks, homeowners and investors, and unfortunately,

  • the entire global economy.

  • So the fed said: we are going to do whatever it takes in order to prevent such a recession

  • like we had in 2008.

  • And that meant printing money and buying corporate bonds.

  • At first glance, it seems like how is that related to bitcoin.

  • It definitely helped the stock market to rise faster than ever, but the fed didn't do anything

  • to boost bitcoin.

  • You see, when the government passed the stimulus bills and filled the economy with cash.

  • A lot of people began to worry about inflation.

  • More money in the economy means the real value of each dollar will decrease, which means

  • holding cash was a bad idea.

  • So investors were buying all kind of assets to preserve their wealth, including bitcoin,

  • so bitcoin prices instantly started rising, but they rose a bit too fast and attracted

  • speculators who wanted to profit from the rise of an asset which is what usually happens

  • when a certain asset start rising too fast.

  • So between September and January, the price increased from 10500 to almost 35K dollars.

  • In less than 6 months, the price rose by over 220%.

  • Everyone expected bitcoin to crash, but then this is what happened.

  • Tesla bought 1.5 billion dollars worth of bitcoin, which boosted the demand through

  • the roof.

  • The news of Tesla investing in bitcoin sent shock waves across the world, pushing more

  • investors to buy bitcoin.

  • In a less than two month, doubled the price, and for the first time, ever bitcoin crossed

  • 60K dollars.

  • To make things worst, Musk tweeted that you now buy Tesla with bitcoin.

  • That gave a lot of legitimacy to bitcoin and made it even more popular.

  • The real value of bitcoin is its network, the fact that millions of people use bitcoin

  • and it makes the financial transaction easier.

  • But no one knows how much bitcoin really worth.

  • It could be worth 1 dollar per bitcoin or 100K per bitcoin.

  • Everyone has his opinion.

  • But the fact is, the recent bitcoin price spike is driven by people's fear of inflation,

  • a bunch of speculators, and some tweets by the king of memes (Elon Musk).

  • Of course, there are a lot of other factors that influenced the rise of bitcoin, but what

  • happens when the fear of inflation will go away when interest rates will be raised.

  • There is a good chance that the demand for bitcoin and other cryptocurrencies will fall,

  • which will drive way speculators which will further drive the price down, which will scare

  • off simple retail investors who wanted to profit from this spike.

  • I personally believe that Tesla will sell its share of bitcoin once something like that

  • is around the corner, but that's my option which could be entirely wrong.

  • That doesn't mean that bitcoin will drop to 0 or it will drop its pre-pandemic levels

  • but it will definitely drop! how big is that crash going to be?

  • Well, only time will tell.

  • But if you are a long-term investor, you shouldn't care, because personally, I believe that cryptos

  • have a future, despite all the challenges they have to go through, despite the fact

  • they are not going to replace fiat money, at least in the coming few decades.

  • They still have a future because the world needs a decentralized financial system.

  • And now it's time to give this video thumbs and make sure to check our second channel

  • called bloom.

  • If I am not posting here, I am definitely posting there, so if you enjoy our videos,

  • you will definitely enjoy our second channel.

  • See you there!

  • Thanks for watching and until next time.

Whatever is happening with this thing called cryptocurrencies is insane.

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The 2021 Bitcoin Crash - Why The Crash is Inevitable!

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    Summer posted on 2021/04/10
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