Unlimited Fiat and governments can suppress the price of Bitcoin? 2 Analysts Discuss Theory and Odds – Bitcoin News Spotlight

Bitcoin’s price has dropped 72.9% in USD value from the cryptocurrency’s all-time high ten months ago, and bitcoin was recently trading for just under $ 19,000 per unit. This week two major cryptocurrency market influencers discussed how governments could suppress bitcoin markets by shorting the crypto asset. However, one of the people notes that the odds of doing so are “in the 0% -1% range”.

“Enough deficiencies in the system to suppress the price”

Bitcoin’s price was lower this week after the initial drop after the U.S. Consumer Price Index (CPI) released last Tuesday, which showed higher-than-expected inflation. Additionally, the cryptocurrency economy, in general, could see another down leg after the US Federal Reserve raised its benchmark bank rate.

The Crypto Fear and Greed Index (CFGI) shows that sentiment has gone from “fear” to “extreme fear” in the last day. Bitcoin analyst on Saturday Willy Woo posted a thread on the possibility of unlimited fiat and derivative markets suppressing bitcoin prices.

Unlimited Fiat and governments can suppress the price of Bitcoin?  2 Analysts discuss theory and probabilities

The wire, called “A Dummies Guide to Selling 42 Million BTC”, talks about how Arthur Hayes created the first “BTC casino used by real people, trading billions a day”. Woo noted that “Arthur gloriously paved the way for us to sell 10 BTC even when we only had 1 BTC – We just need people to take the other side of our bet,” added Woo.

After describing how Hayes created Bitmex in his own way, Woo discussed how CME Group, the largest derivatives exchange in the world, “launched a BTC casino where you could face USD to play”.

“Wall Street hedge funds loved it,” notes Woo’s Twitter thread. “What are the limits on the sale of BTC now? Unlimited. Fiat is unlimited”. Woo further detailed that BTC had a market cap of $ 0.37 trillion while the US dollar is around $ 22 trillion.

The analyst added that $ 1.1 trillion has been created in the last year and said that the “theoretical short-circuit power with fiat” is colossal and that it is “billions of BTC”. Woo pointed out:

BTC is not to be killed, it just needs short enough in the system to suppress the price. Without a large market capitalization, BTC does not have a global impact.

Unlimited Fiat and governments can suppress the price of Bitcoin?  2 Analysts discuss theory and probabilities

Taming Bitcoin

Woo is not the only person to discuss matters in this way, as numerous cryptocurrency advocates have claimed that bitcoin derivatives markets and even exchange-traded funds (ETFs) could harm BTC’s value. This fear scared investors well before CME Group introduced the BTC futures markets in 2017.

Years later, some studies indicated that it was possible that institutional investors could manipulate the price of bitcoin. CME Group has exposure to a myriad of brokerage firms around the world and this August CME bitcoin futures were traded at higher discount spot prices since the start of trading in 2017.

In November 2017, CME Group chairman emeritus Leo Melamed told Reuters reporters that bitcoin was becoming a “new asset class”. However, Melamed also said it was “a very important step in the history of bitcoin” and that CME Group would “regulate, make bitcoin neither wild nor wilder”. Melamed further pointed out:

We will tame it into a normal-type commercial instrument with rules.

Alex Krüger Says Shorting Bitcoin’s Price So People Lose Interest Permanently Has a Low Chance

On Saturday the economist, trader and entrepreneur Alex Krüger tweeted that “governments could stop bitcoin quite simply.” Krüger further added how it was possible. “Simply short. Keep it under $ 10,000 for a long time, [and] watch most people lose interest permanently. There is no need to worry about 51% of attacks. “The economist also added that his statement was a copy and paste of the same statement. She said in 2019, and that the likelihood of such things happening is quite low.

“It can happen?” Krüger asked. “Of course I can, I covered the mechanics in the original thread. It is probable? I would put the shares between 0% and 1% “. Krüger too mentioned Willy Woo’s Twitter thread and when someone replied that it was “much more feasible to simply ban PoW under climate control rhetoric”, Krüger he answered: “100%”.

In the Woo Twitter thread, some people said that removing BTC from spot market trades was the best way to go. At the time of writing, cryptoquant.com cryptocurrency exchange data indicates that there are approximately 2.3 million BTC stored on centralized trading platforms.

“[Bitcoin] at a low price means more people buy [and] taking it off trade, “said Dr. Crypto Tony.” This makes BTC more expensive. They can’t manipulate it like silver [and] gold because people have self-storage. Finished BTC drives up the price as more people buy and hold individually. To take [it] out of trade “.

Tag in this story

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What do you think about the discussion surrounding bitcoin shorting and governments suppressing the bitcoin price? Let us know what you think about this topic in the comments section below.

Jamie Redman

Jamie Redman is the News Lead of Bitcoin.com News and a financial technology journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News on the disruptive protocols emerging today.

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