This Historic Move Could Send Bitcoin’s Price to $1 Million – Meanwhile, Ethereum, BNB, Terra, XRP, Solana, Cardano, Dogecoin Are Sinking
Bitcoin and cryptocurrency prices have retreated this week.
Bitcoin price fell below $44,000, losing around 7.7% of its value. Other major cryptos are also in a downtrend. Ethereum price fell by 5.4%, BNB by 3.7%, terra by 0.3%, solana by 5.63%, cardano by 10.4% and XRP by 10.5% and dogecoin by 0.1%.
Now, there are a few isolated, but seemingly related, developments that have sparked wild speculation about the monumental role bitcoin could play in the global financial system in the long term.
First, Russia is considering accepting bitcoin for its fossil fuel exports. Last week, Russian Energy Minister Pavel Zavalny said “friendly” countries, including China, could be allowed to buy gas and oil in their currencies. or Bitcoin.
“We have long been proposing to China to switch to settlements in national currencies against the ruble and the yuan,” Zavalny said. Later, he added, “You can also trade bitcoins.”
[Ed note: Investing in crypto is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Another big move took place in the “nether country” – Australia.
On The Run, an Australian company that owns more than 170 BP stations, will allow its customers to pay for petrol in bitcoin. It will be the largest retailer in Australia to accept crypto. It is partnering with Singapore-based trading company Crypto.com to deploy processing terminals to facilitate such payments.
Marcus Sotiriou, an analyst at digital asset broker GlobalBlock, thinks this could be the start of bitcoin’s emergence as a neutral “petro-asset.” “This adds more weight to the idea of bitcoin becoming a petro-asset after Putin recently allowed ‘friendly’ countries to pay for oil in bitcoin,” he wrote in a note.
For much of the last century, oil was traded exclusively in dollars, which cemented the currency’s status as a reserve currency. This is why the dollar is often nicknamed the “petrodollar”.
But as I wrote last month, “the foundations of this system, which has worked for 50 years, are being challenged. An article from the wall street journal Writer Jon Sindreu, for example, said the sanctions on Russia, which showed that reserves accumulated by central banks could simply be withdrawn, raised the question of “what is money?”
This has led Russia and its ally China to consider neutral oil-to-dollar payment alternatives. And BitMEX co-founder Arthur Hayes thinks gold, or even bitcoin, could fill that need.
“A new neutral reserve asset, which I believe will be gold, will be used to facilitate global trade in energy and food. From a philosophical point of view, central banks and sovereigns appreciate the value of gold, but not that of bitcoin…Bitcoin is less than two decades old. But don’t worry: as gold succeeds, so will bitcoin.
In the long term, Hayes expects gold to hit $10,000 on the spot, which he says would make hard money assets, including digital assets, more valuable. If gold reaches this level, Hayes thinks the price of bitcoin could be tied to $1 million per coin:
“As gold breaks above $10,000, bitcoin will hit $1,000,000. The bear market in fiat currencies will trigger the biggest transfer of wealth the world has ever seen.”
Blackrock CEO Larry Fink also believes the war will accelerate the adoption of digital assets, although he did not specify any crypto or target:
“The war will cause countries to reassess their monetary dependencies…Even before the war, several governments were looking to take a more active role in digital currencies and define the regulatory frameworks within which they operate,” he said. .
Bitcoin has come a long way.
Not so long ago, Wall Street was deriding this cryptocurrency as the biggest fad in history. And lawmakers viewed bitcoin as a tool primarily used by drug dealers, money launderers, and other shady characters.
Today, it is increasingly recognized as a store of value by some of the most renowned fund managers. And the world’s third-largest oil exporter sees it as a currency of settlement for its roughly $300 billion energy exports.
That said, such tectonic changes usually take a long time to occur. And they are very difficult to predict. But the mere fact that we are talking about “petrobitcoin”, as wacky as it is, is a sign that this crypto is maturing as a monetary unit.
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