Could Paper Bitcoin Kill Bitcoin?

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In this video, I discuss whether governments or central banks could use Bitcoin futures to try to suppress the price of Bitcoin.

Paper Bitcoin:

1) Bitcoin IOU (you leave your BTC on FTX or Celsius or Coinbase and they tell you that they own Bitcoin for you, while they may or may not actually have it when you ask for it)

2) Derivatives like futures that track the price movement of BTC

Paper Bitcoin cannot be moved on the Bitcoin network, and offers none of Bitcoin's special features like censorship-resistance, permissionless sending, or scarcity.

When a government prints money to come up with margin for Bitcoin futures, it is pumping the price of BTC in that currency, while trying simultaneously to suppress the price of BTC by going short those futures.

If any faith in that sovereign is lost or diminished, the result could be the mother of all short squeezes, as the currency fails and thus Bitcoin's price in that currency trends towards infinity, thus bankrupting the sovereign through its short futures position.

When it comes to Bitcoin, if you go short you will go broke.

Every single person or entity that shorts Bitcoin will eventually go bankrupt. Not even sovereigns are immune.

A rational government will not try to fight the soundest money ever discovered (Bitcoin).

Rather than trying to short it, a rational government or central bank will print money and buy BTC.

So while the US is trying to keep down the price of BTC by shorting BTC futures, other countries may be trying to drive up the price of Bitcoin by going long BTC futures.

Willy fails to mention that the dynamic can work both ways:

BTC futures and other derivatives can also be used to drive up the fiat value of BTC, and probably will be, given the human tendency to prioritize greed over everything else.

Not investment advice! Consult a financial advisor.

GATA:
https://www.gata.org/

Willy Woo's tweets:
https://twitter.com/woonomic/status/1...
https://twitter.com/woonomic/status/1...

I am not being paid or otherwise compensated by any company or cryptocurrency project that I mention in my videos. My opinion is not for sale. Please do not contact me with any affiliate or advertising deals.

#Bitcoin
#futures

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