Number 1 reason that bitcoin price is
going up
in my opinion is because people are
losing
faith in this. You see the paper currency?
people are losing faith in paper
currency
and I will explain in this video why is
that
last year in april 2020 when pandemic
hit
a government decided to print one
trillion dollar
and I had around 50 000 in my bank
account and I got super worried the
reason for the worry was
let's say fifty thousand dollar can buy
you x amount of things
after government is done printing the
money to buy same x amount of things
now I have to spend more money like
60 000 dollars.
and the reason is when government prints
money the
purchasing power of your current cash
goes down
so then how do you tackle with the
situation?
You know Ray Dalio a famous investor
has been saying this repetitively that
cash
is trash. Yes, cash is trash.
cash is trash in the world of fiat
currency where government can print
money out of thin
air. In past
the money printing was backed by gold
but the gold standard was removed.
And nowadays government have no control.
They can just print money as per their
will
out of thin air so to tackle the
situation
you can convert this cash
into some tangible investment such as
real estate or stock market
so when you buy a real estate you have a
home it's a tangible investment. It is
not like paper currency
which is you know government just keep
on printing and the purchasing power
goes down.
But stock market and real estate also
has its own set of disadvantages
so sometimes people are like I want a
pure store of value
I don't want to go into stock market
real estate
so then other investment is gold.
You put money in gold gold is a precious
metal it's not like you can print it out
of thin air and
It's a precious metal it is trusted so
people buy gold. But the problem with
gold is that
you can't carry it around for your
normal day-to-day trade
let's say I go out I want to buy a cup
of coffee
I'm not going to carry a gold coin and
ask that coffee vendor that okay
cut little you know make a cut in this
coin and take
take your amount. So nowadays
bitcoin is a digital gold bitcoin is
like gold in a sense that the supply is
limited
you know the maximum supply that bit
can have bitcoin have
is 21 million after that you can't
make more bitcoin or you can't produce
more bitcoins.
So that way the the supply is limited
and the transactions are very easy so I
can have
my mobile app I can go to a coffee
store
and just you know ask the vendor to take
the
the money take the bitcoin so making
transactions
is very very easy, it is super fast,
secure
and how does that work well I have a
separate video which I'm going to link
in the video description below which
explains
what is bitcoin in a very simple
language so if you want the video you
will get an idea on
how bitcoin works underneath you know
the technology
but overall bitcoin is like digital gold
and that is the reason many
people are are putting faith in this
digital currency because
guess what like would you like it if
someone is taking money or cash
out of your account without your
permission I don't think anyone will
like it and that's what is exactly
happening in today's world where
government just keeps on printing money
and the purchasing power of your cash
goes down so many people are
moving their cash or
their money or wealth into
cryptocurrencies like bitcoin. Now I did
not make this video to give any
investment advice because
the current price of bitcoin has
one more factor waived into it which is
a factor of gambling.
Like many folks they want to make quick
money and they're just
gambling you know so it's like Tesla
stocks Tesla stock is going up yeah elon
Musk has a great vision
but then not many people are investing
because Elon Musk has a great
vision to go to send humans on Mars. It's
just because
they want to make quick money so when
you look at tesla stock
there is a real value and and there is
a factor of gambling. So same thing is
happening with bitcoin there is a factor
of gambling.
So I'm not you you have to decide for
yourself if you want to invest in
bitcoin but I just wanted to give you a
quick uh my quick two cents on why
bitcoin price is going
up because government started
printing
a lot of money using quantitative
quantitative easing
during 2008 sub prime crisis
and nowadays it's like they want to keep
the stock market
up and any crisis hits they just print
money left and right.
And I don't think that this will stop
government will continue to print money
the the purchasing power of paper
currency
will continue to decline
and for that reason cryptocurrencies,
gold and all these assets will see the
appreciation. Now one thing about bitcoin
is
today bitcoin cannot be used as a
currency because the fundamental promise
of currency is that it has to be stable.
Bitcoin is very volatile you know right
now it's 60 000
tomorrow it might be 40 000 or 100
000 no one knows. So right now it's all
gambling and trading but hopefully at
some point
the value will stabilize and people can
use bitcoin as a currency.
Now right now it's not like people
cannot use bitcoin as a
right now you can buy Tesla for example
using bitcoin you can go
to Microsoft Store or you know
e-commerce website such as overstock.com
and make a transition transaction using
bitcoin. So the
real use case of bitcoin are there in
the world but
it's not very widespread and the value
of bitcoin is
not very very stable. So that's the
reason it will take some time
before it gets to a stable level. I hope
this
video helped you answer your question
and if you want to know more about
what is bitcoin how it works if you want
to even know how bitcoin mining works
then I have a couple of videos which I
am going to link in the video
description below.
Thank you for watching.