Crypto Econ. 101 - Lesson 2 - part 3 - final. (Market cap isnât made of foil)
Now that we understand what money is, what inflation does, and how much 1 BTC is worth, itâs time to focus on something simple yet often overlooked: how the market cap of a coin defines its price. Everything in this universe operates on supply and demand. Even galaxies follow this principle: what isnât useful is pushed away by gravity. Things need to serve a purpose to continue existing; otherwise, they vanish. A perfect example is body hair. Have you noticed people losing body hair over time? Thatâs evolution happening right before your eyes. We no longer need thick chest hair for survival, so itâs fading away. I frequently come across price predictions from so-called âfamous specialistsâ and everyday believers. Itâs not uncommon to hear people claim that Bitcoin will hit $1,000,000, but is that even possible? Like stocks, cryptocurrencies are tied to their market capitalization. Bitcoin currently has around 19.5 million tokens in circulation. For #BTC to reach $100,000, its market cap would need to grow to $1.95 trillion USDâalmost double its current size. To achieve this, Bitcoin would need to regain the market dominance itâs lost to coins like Ethereum and Binance Coin (BNB). And that gets increasingly difficult as new players, such as #Solana and #XRP, continue to emerge. Speaking of #XRP, itâs another frequent target for wild price predictions. Some claim #XRP could hit $1,000. But letâs break it down. Unlike Bitcoinâs 19.5 million tokens, XRP has a circulating supply of 53 billion tokens. This sheer abundance naturally reduces its value compared to Bitcoin. For XRP to reach $1,000, its market cap would have to balloon to $53 trillion USD. To put that into perspective: âą The worldâs GDP in 2023 is $105 trillion USD. âą The U.S. national debt is around $33 trillion USD. âą Apple, one of the most valuable companies on Earth, has a market cap of only $2.7 trillion USD. âą The entire U.S. stock market is valued at approximately $45 trillion USD. As you can see, itâs virtually impossibleâat least within natural economic limitsâfor coins to achieve such astronomical prices. There simply isnât enough wealth in the world to support these valuations. So the next time someone throws around bold price predictions, ask them, âWhere the heck is all that money supposed to come from, Mr. Guru?â Understanding how market cap works should be enough to keep you out of meme coins. These are often schemes designed to take your money. When you see price predictions for meme coins, remember: they are all lies. Meme coins have no inherent value or real use. Thereâs no reason smart money would flow into a meme coin unless the goal is to take money from retail investors chasing the dream of easy profits. The same logic applies to âplay-to-earnâ games. In order to pay you, the money must come from somewhere. You need to ask yourself: âIf I put my money into this game, someone else will profit from my investment. So for me to profit, new people must keep joining. Isnât that exactly how pyramid schemes operate?â Letâs take a look at $NEIRO : âą Unrealistic Returns: The promised returns donât make sense. With no real utility, the coin has no intrinsic value. âą Ponzi-Like Structure: For some people to profit, others have to buy in. If no new buyers come, the whole thing collapses. âą Lack of Transparency: There is no available information on who is behind #NEIROâno team, no administration, and no clarity on how the investments are managed. âą Withdrawal Issues: There are already reports of people being unable to withdraw their money. âą No Regulation: #NEIRO operates without any regulatory oversight, leaving investors exposed to significant risk. âą Aggressive Marketing: They push a sense of urgencyââbuy now or miss out on huge returns.â This is typical of schemes on the verge of collapse. Some early investors may profit, but they are used as bait to lure new buyers. If they donât cash out quickly, they will lose too. In our next article, weâll dive into a topic youâre sure to find intriguing: crypto market manipulation. Iâll explain how whales and institutional investors manipulate the market to cheat you out of your money. Donât miss itâbe sure to follow and share my posts. By building a more informed community, we can foster greater stability and trustworthiness in the crypto space.
Crypto Econ. 101 - Lesson 2 - part 2 (All that glitters is not gold)
I hope you took the time to read the first part, or you will be kinda lost⊠At the end of the day, 1 BTC is worth 1 BTC, but that value is still tied to its price in USDâright now, around $58k. The key to stabilizing both the economy and Bitcoinâs price is to move away from the gold standard entirely. If the gold market werenât so tightly controlled to prevent inflation (since itâs where the 1% store their wealth), weâd see a flood of gold, and its value would crash. But what if governments switched to a Bitcoin standard instead? Rather than Bitcoin being worth $58k, governments would have to produce $58k worth of goods and services to afford 1 BTC before printing more money. And hereâs were btc has the edge over gold: gold is mintable. You can dig up more of it from the ground. And if we overmine gold, it would flood the market and collapse the global economy. Thatâs why we have to look at alternatives like Bitcoin, which is capped in supply and canât just be âdug upâ to infinity. Take Venezuela, for example. It holds the largest untapped gold reserves in the world and more oil than the entire Middle East, yet its people are starving, and thereâs little resource exploration happening. Why? You may call me crazy, but the reason is the same as why Pollockâs paintings are worth millions. Itâs all about controlling the narrative and the market. Venezuela poses a threat to the global economy because if it were to flood the market with its resources, it would destabilize the value systems that protect the wealthy. Relaying on gold is too much trouble. For decades, the U.S. has maintained its economic dominance by strategically outmaneuvering (or outright eliminating) its competitors. Germany made great cars, Japan excelled in electronics, Saudi Arabia had oil, Iraq had oil⊠and then they got a few F-22's sending them democracy. Someone should warn Hong Kongâtheyâre sitting on valuable microchip technology, and history is just about to repeat itself. If not even gold can be trusted, wtf should I do with my money, you say? Make sure to like this post and hit follow. Iâll be posting the third part soon, where I dive into one of the key things that move markets: price predictionsâand why theyâre always wrong. And if you still doubt me, check out #xrp price. $
Please listen to me. Do not sell, DO NOT TRADE, your #xrp. There will be a time when it will go up, non-stop. You will think âitâs the top, it canât go up againâ, and you gonna sell for 1 then buy for 2.
Take a look on $XRP and $ETH correlation. You gonna see the pattern.
Crypto Econ. 101 - Lesson 2 - part 1 - how much is 1 #btc worth? (wtf does it buy?)
In my last article, we talked about how money itself doesnât have any real valueâitâs just a piece of colored paper. Much like Heisenbergâs uncertainty principle, what gives money value is perceptionâitâs the belief in it that matters. In the case of fiat currency, itâs our faith in the government that backs it. Now, letâs talk about value versus price. Take, for example, the infamous Jackson Pollock paintings. Why is a splatter of paint on canvas worth millions? Well, it wasnât always seen that way. Itâs a lesser-known fact that the CIA, during the Cold War, played a role in promoting Pollock and other abstract expressionists as symbols of free expression and American cultural superiority. By manipulating cultural perception, they inflated the "value" of these works, even though their intrinsic worthâpaint on canvasâremained the same. This brings us back to Bitcoin. Right now, 1 #BTC is worth around $58,000 USD. But why? Much like Pollockâs paintings, its price is determined by what people believe itâs worth. As long as people have faith in its potential, it holds value. But if tomorrow that belief wavers, the price could plummet. Now imagine if the U.S. government printed $3 trillion and bought up Bitcoin. At first, the price would skyrocket due to demand. But then, inflation would take hold, and the value of the dollar would collapse. The price tag on Bitcoin might still read $58,000, but its real-world value would be diminished, much like how a piece of art's price doesnât always reflect its true worth. After Bitcoinâs price surges due to the influx of $3 trillion, hyperinflation kicks in. Youâll see price tags changing several times a day as the dollar loses value rapidly. While Bitcoinâs price might still be $58,000, the purchasing power behind that value plummetsâit can no longer buy what it once could. This is where the key problem lies: Bitcoin, or any currency for that matter, cannot be truly independent as long as itâs tethered to fiat currencies like the dollar. To break free, Bitcoin needs to be tied directly to production, similar to how gold was once linked to the value of money. For any currency to hold real value, it must be backedâor at least indexedâby some tangible system. The U.S. dollar, for example, is backed by the governmentâs ability to generate revenue from taxes. The government essentially takes a portion of the countryâs production (in the form of taxes) and redistributes it into the economy. But when too much of the economy is taxed, production slows down, leading to public and private debt. People and governments take out loans to stay afloat, and without proper capital management, that debt snowballs out of control, creating the very inflation Bitcoin aims to escape from. Hereâs the real issue with loaned money: most of it isnât even real. Banks use a system called fractional reserve banking, which means they only have to keep a small portion of deposits on hand. Back in the day, that could be as low as 10%. So, if a bank had $300,000 in reserves, it could lend out up to $3 million. The money they loan Itâs basically created out of thin air. The problem is, this loaned money isnât tied to anything realâthereâs no actual production behind it. Itâs just numbers in a system, which lead to inflation because thereâs more money chasing the same goods. When the money supply increases without a corresponding increase in production, prices go up, and your purchasing power goes down. This wasnât always the case. Before the 20th century, currencies were backed by the gold standard. If the government wanted to print money, they had to back it with gold, which acted as a natural limit on how much money could circulate. This system kept inflation in check because governments couldnât just print money whenever they wantedâthey had to buy gold first. It was like a safeguard. But in the 1920s, things started to change. Governments realized that using tax money to buy gold was slowing down their ability to spend on things like public projects or services. It was easier to print money without worrying about having gold to back it up. So, they moved away from the gold standard, and by 1929, things came to a head. The stock market crash wasnât just about printing moneyâit was a combination of factors like over-speculation and creditâbut abandoning the gold standard allowed more unchecked money to flow, which ignited the chaos. Once the gold standard was gone for good, there was no stopping governments from printing more and more money. And thatâs when inflation became a bigger problem, one weâre still dealing with today. Do you wanna know the main difference between gold and bitcoin? Follow me and get a notification for when the second part of this article is released!
I donât believe in price prediction. But if you wanna make money, buy #xrp.
I canât tell you many details, but Blackrock, Vitalin, Bank of America, and every other corporation sending money cross border will be doing it in the next months.
Before we can even talk crypto, we need to get something straight: what the hell is money? Those colorful bills or numbers in your bank account arenât valuable on their ownâtheyâre just placeholders for something bigger: the value you create. Money didnât always exist. People used to barterâtrade one good for another. But what happens when you produce something like pencils? You canât eat pencils, right? So now youâre stuck wandering around, looking for someone who has rice but also wants pencils. Not exactly convenient. Thatâs where money steps in. Itâs a tool to simplify things, a stand-in for the value youâve produced. Instead of finding the perfect bartering partner, youâre handed this universal promise: a note that says, "Hey, you made something valuable. You can exchange this for whatever you need." The Real Value of Money Hereâs the deal though: money only works because itâs tied to production. If no oneâs making anything, money loses valueâand fast. Thatâs where inflation comes in. Picture this: you work in a pencil factory, making one solid pencil. Itâs worth something. Now imagine the government comes along, snaps your pencil in half, and declares each half is now a full pencil. Suddenly, there are twice as many pencils, but theyâre worth less. Everyone has pencils, but no one wants them anymore. Thatâs inflationâmore money or goods floating around, but less value behind them. Tying This to Crypto This is why people are drawn to crypto. Bitcoin, for example, has a fixed supply. No one can "snap it in half" to make more of it. That built-in scarcity makes it resistant to inflation, which is something traditional currencies canât always promise. So, considering all this, how much is btc really worth? Ready for the next step? Letâs dive into how much 1 #BTC is worth in the next lesson.
Do you wanna be a millionaire by trading crypto? I will teach you the secret whales have been applying.
First, accept you are not smart enough.
Second, trying to predict market movements itâs impossible outside major moments, like rate cuts.
Third, you only lose if you sell. But your coin, and keep it. The secret of wealth is accumulation, not trading volume.
Fourth, Don't listen to anyone. Social media is a manipulation tool (you are a manipulation tool). Ppl hype their faith, not their intel. If you buy what others tell you, you are giving your money to them.
On my next post I will explain how Whales manipulate the market to take your money. Follow me!
So, papa Trump is trying to bully other countries to back USD.
Letâs take a look on the economic fallout?
1. Global Trade Disruptions: These tariffs will prompt retaliatory measures from major trading partners like China, India, and Brazil, leading to a steep decline in global trade volumes. For instance, U.S. trade with China alone amounted to over $250 billion in 2023, and a 100% tariff would likely devastate these economic ties. Of the US don't sell, someone will.
2. Rising Inflation and Consumer Costs: If the tariffs were applied, many goods currently imported from nations abandoning the dollar would see drastic price increases, leading to heightened inflation. This is especially concerning given the U.S. economy's reliance on imported goods. Higher production costs for businesses could also result in layoffs and reduced consumer spending.
3. Accelerating De-Dollarization: Rather than securing the U.S. dollar's dominance, these tariffs could hasten the trend of de-dollarization, as nations might aggressively seek alternatives to avoid punitive measures. Countries like China and Russia have already begun to establish alternative financial systems, and Trump's proposal may only push others in this direction faster.
4. Economic Slowdown: In the long run, tariffs of this magnitude could reduce U.S. GDP growth by up to 0.8%, according to economic projections, exacerbating an already fragile global economic recovery. Domestically, this could lead to higher unemployment rates and a slowdown in industrial output as companies face higher input costs and reduced international demand.
While Trump's tariff proposal is dreams of protecting U.S. economic interests, it risks triggering a series of retaliations, inflationary pressures, and a further erosion of the dollar's global dominance, potentially leading to significant economic challenges for the U.S. in the next decade.
Since his speech is purely emotional. He is trying to pray on the average American violence, xenophobia and ignorance to get elected.
Is Vitalik Buterin Dumping Ethereum? Or Just Keeping Us on Our Toes?
Ethereum co-founder Vitalik Buterin has been stirring the pot again, and not just by tinkering with blockchain protocols. Recently, Vitalik unloaded a cool 5,000 $ETH in August 2024, sending a ripple (pun intended) through the crypto community. The reason? According to Buterin, itâs all for the greater goodâcharity and supporting projects in the Ethereum ecosystem. He claims he hasnât sold any $ETH for personal gains since 2018. So, is this just a noble move or something else entirely?
Of course, Buterin isn't the only one making waves. The Ethereum Foundation has also been unloading $ETH. Since the start of 2024, theyâve sold 2,616 $ETH, raking in around $7.64 million. And let's not forget that massive 35,000 $ETH transaction back in August. It makes you wonderâare they just playing it safe with some âroutine treasury management,â or do they know something we donât?
Despite all these sales, both Buterin and the Foundation insist it's all about funding operations and not signaling doom for Ethereum. But with $ETH prices dipping, some investors might be left scratching their heads. Are these big moves by the Foundation and its mastermind strategic planning, or are they just trying to cash out before the next market hiccup?
Whoâs really holding the bag here? Let me know what you think in the comments!
If you wanna succeed on cryptoâ well, donât listen to me, listen to Bruce: âBe like water making its way through cracks. Do not be assertive, but adjust to the object, and you shall find a way around or through it. If nothing within you stays rigid, outward things will disclose themselvesâ