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On one hand, 2020 has been an excellent year for Bitcoin, which has just reached its all-time high (ATH) on 30 November. On the other, the global economic climate is growing increasingly uncertain, and Bitcoin is being positioned as a major play against inflation.
Apart from buying cryptocurrency, the crypto industry has many other ways to diversify your money intelligently and profitably. One of those ways is community cryptocurrency mining of Summit Mining, a new yet ambitious French company. Why does it provide a decent opportunity in the current economy? Let’s start with a quick analysis of the situation.
A gloomy context for traditional finance
Unless you live on a planet outside our solar system, you probably have noticed that the global economic outlook is anything but positive. The COVID-19 crisis has brought most economies to a standstill, and thousands of companies globally are being forced out of business.
To compensate for this, we also have the widespread use of monetary stimulus and magic money policies (about 460 billion euros were spent or promised within a few weeks in France last spring, the equivalent of a year’s worth of government spending.) In their words: “The Covid crisis confirms our entry into the world of hyper-debt, just as it makes the permanent support of monetary creation indispensable to maintain deficient growth.”
It is often forgotten that to be valuable, a currency must have an essential characteristic: scarcity. If gold is so valuable, it is not just because it is “pretty.” It is valuable because it is rare and because it is difficult to mine. This notion of scarcity seems to have been forgotten by most countries that shoot new money out of monetary bazooka and take away the purchasing power of all their saving citizens.
Fortunately, twelve years ago, Satoshi Nakamoto invented the first verifiably scarce digital asset: Bitcoin.
The unstoppable rise of Bitcoin
Since its launch in January 2009, Bitcoin has been brought out of obscurity and is likely to make even more noise in 2021. It has gone from being a collectible for geeks and the sulfurous currency of the Dark Web to a much more acceptable status that attracts investors from all horizons, individuals, and institutions alike. Bitcoin, considered by Bank of America Merrill Lynch as the best performing asset of the decade, has become a real safe haven, a lightning rod against inflation, “digital gold”, BlackRock’s Rick Rieder, investment director of the world’s largest asset manager, said a few days ago.
But that’s not all: recently, PayPal has launched its crypto services in the United States and will make them available to its 346 million worldwide customers in the coming weeks. As a result, many people will be able to buy Bitcoin with a single click of a button.
One of the most telling examples of the rise of institutional players’ interest in Bitcoin is Grayscale Investment’s Grayscale Bitcoin Trust, an entity that holds more than 500,000 BTC for their clients. The latest bullish actor is Guggenheim Partners, an investment giant with more than $275 billion in assets under management. A few days ago, they decided to invest up to 10% of its net assets in Grayscale Bitcoin Trust (GBTC).
As for today, there is no doubt that Bitcoin is here to stay as many specialists already claim that physical money will largely disappear from circulation by the end of the decade.
Wall Street legend Bill Miller said he “strongly” recommends Bitcoin. Another famous billionaire investor Stanley Druckenmiller revealed that he now owns Bitcoin as a store of value.
In the political sphere, things also seem to be moving in the direction of Bitcoin as well. For example, Cynthia Lummis, a pro-Bitcoin US senator, embraces this change, as does Janet Yellen, who will be part of Joe Biden’s team as Secretary of the Treasury. In the words of Bitcoin investor and podcaster Anthony Pompliano: