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    Bitcoin | Photo: Reuters

Published 11 February 2018
Bitcoin and Petro look more likely to first force their fanged critics to swallow their forked tongue — and eventually hightail into oblivion, their tails between their legs.

What’s it about today’s emerging cryptocurrencies that so angers the chieftains and gatekeepers of Modern Capitalism?

Venezuela Pitches Oil-Backed Cryptocurrency to OPEC

Take Bitcoin. In 2017, its value soared by 1,000 percent, multiplying 20 times in 12 months, its market value skyrocketing from US$1,000 per coin in January to US$20,000 in December, accumulating a total circulating currency value of over US$160 Billion.

Now gone mainstream on capitalism’s global Main Street, analysts are today predicting the gilded coin’s value can reach US$30,000 each and eventually climb as high as US$142,000 — before 2018 ends.

Bitcoin is also a very lucrative commodity. Valued more than gold, it is now so popular that the Chicago Mercantile Exchange, CME, was forced last December buck the trend and allow trading in crypto futures.

Doomsday Predictions

However, its unrivaled value and popularity notwithstanding, Bitcoin’s “Doomsday” is also being loudly predicted. First came concerns about its founders being invisible, followed by speculation about its longevity. Now its critics are banking on the sky-high coin tossing itself dirt-cheap back down to earth.

Its inherent volatility — with no central bank backing, not being regulated or taxed, but being manipulated by speculative gold-diggers — has led some governments to start acting against cryptocurrencies, ostensibly to protect traders and markets.

Indeed, China, South Korea, India, Britain and the U.S. have also all been moving to bring Bitcoin to heel.

The naysayers’ prime warning words today are: “The Bitcoin Bubble is about to burst!”

Dollar Supremacy

Same with Venezuela’s new cryptocurrency, the Petro.

Washington has long been using the U.S. dollar’s global supremacy to suffocate the Venezuelan economy through successive financial and economic sanctions.

In the past year, Washington has openly admitted moving purposefully to “deny” Venezuela access to “critical sources of funding.” As a result, Caracas is almost unable to service its debts or pay for imports using U.S. dollars, as banks across the world, reacting to the U.S. sanctions, are refusing to accept its payments. The national oil company, PDVSA, has also been rendered almost unable to sell crude on the world market.

New Measures

Last year, the Bolivarian Republic announced several new measures to defy Washington’s ongoing financial suffocation.

In September, it started reporting its oil prices in Chinese currency, instead of U.S. dollars. Then in December it floated the Petro, backed by the country’s natural resources — gold and diamonds, oil and gas. Caracas also signed-up five billion barrels of oil to back it up.

Registration then became necessary for access to the Petro, through a new Registry of Cryptocurrency Miners.

President Nicolas Maduro said the new measures would help the country achieve the level of “monetary sovereignty” it needs and seeks – and indeed, early results were quite encouraging, as over 860,000 Venezuelans signed-up to use the Petro in its first month on the market.

Nothing New…

Registration for use of cryptocurrencies is expected to eventually iron out existing difficulties caused by illegal use of Bitcoin in Venezuela. But distant analysts are also already casting shadows of doubt over the Petro’s future.

Yet, none of this is new, as history has shown that every time a new currency emerges, the traditional rulers of the international monetary roost always seek to discourage trust through negative predictions about reliability and/or longevity.

The U.S. dollar, the British Pound (Sterling) and the Japanese Yen have dominated global currencies for as long as anyone can remember, with no question about their reliability. But today’s forecasters of doom and gloom continue to proclaim that Bitcoin and Petro can be used for money laundering, financing drugs and other illegal activities.

Here again, that’s not new either, as, over time, all the world’s corrupt elements have always successfully used clean U.S. dollars for all their dirty businesses.

Fear and Hypocrisy

The expressed fears of positive possibilities for cryptocurrencies have been driven by Bitcoin’s spectacular rise. The traditional currency guards fear its value boost can lure investors — and also spur investment in other cryptocurrencies, including the Petro.

Its inherent volatility is causing most major institutional investors to hedge their bets on Bitcoin (at least for the time being), while its enthusiasts are hoping it will become the new gold standard for safe investments.

Today though, more hedge funds are adding Bitcoin to their portfolios, its growing momentum helping make it look more legitimate to investors and its staggering rise attracting millions of new retail investors, mostly ordinary people.

There’s also a heavy dose of hypocrisy involved.

The big banks say they fear Bitcoin will destabilize the currency markets. But the feared coin’s US$400 Billion in global market capital value is nothing compared to the existing US$55 Trillion in equities and US$94 Trillion in bond markets.

JP Morgan-Chase, Citibank and Lloyds have banned customers from buying cryptocurrencies using their credit cards. But while their CEOs are calling Bitcoin “a fraud,” they are also simultaneously declaring plans to facilitate trading in its lucrative crypto-market.

There are also voices of dissent from within. J.P. Morgan-Chase CEO Johnny Dimon — an outspoken Bitcoin critic — insists that “It’s worse than tulips (and) it won’t end well.” But Goldman Sachs’ Jeff Curie says of the same coin: “It’s not that much different from gold, so I don’t see why there’s all that hostility towards it!”

Times a-changing…

Meanwhile, observers predict Bitcoin will be listed on several global currency exchanges before starting to dip.

Never mind the loud rants of the raging critics, the new cryptocurrencies have been neither washed nor wished away.

The loud fears are driven by Bitcoin’s staggering rise also giving rise to strong possibilities of eventual official intervention and regulator-scrutiny.

Cryptocurrencies are not usually backed by governments, central banks or regulators. But from the evidence emerging around Bitcoin, all that is changing.

No crypts…

Then there’s the dire difference between Bitcoin and Petro: the former is only a physical asset, but the latter is backed by natural resources.

Today’s loud claims against these two currencies sound very much like scripts from the age-old popular horror movie series called “Tales from the Crypt.”

But far from heading to their crypts tomorrow, Bitcoin and Petro look more likely to first force their fanged critics to swallow their forked tongue — and eventually hightail into oblivion, their tails between their legs.

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