Bitcoin on the way to an explosion? This good news, which comes straight from the USA, makes investors confident!

  • In the USA, the administration Biden establishes the framework to fully integrate Bitcoin and other digital assets into the broader financial system.
  • The decentralization bitcoin and its scarcity make it a hedge against central banks, politics and inflation.
  • According to technical analysis and Elliott wave theory (or Elliott Wave), Bitcoin’s price action looks favorable going forward.

The thesis

Bitcoin (BTC-USD) and other cryptocurrencies have been considered taboo by much of the market until recently. In no time, we now have professional sports teams, hedge funds, and billionaires using and buying digital assets. President Biden has now released a Executive Decree to coordinate financial regulators to regulate and understand digital assets. Less than a decade ago, it seemed like the US would probably have nothing to do with digital assets, as they operated like an anarchy compared to traditional financial systems. With many countries exploring digital assets, the United States didn’t want to fall behind, which means Bitcoin and other digital assets are here to stay. As inflation continues to rise rapidly, Bitcoin is becoming increasingly attractive.

Biden’s Executive Order on Cryptocurrencies

Joe Biden’s executive order regarding digital assets is a huge plus for active crypto investors and those who have been on the fence. This decree will establish a regulatory framework for digital assets, allowing them to mitigate the use of digital assets for illicit activities like money laundering and tax evasion. A regulatory framework will create a much more stable and secure market for those involved in digital asset trading. Even better, digital assets will be taxed as standard investments based on long-term/short-term capital gains. Given that the government could have easily assigned digital assets a tax bracket of its own, this is great news.

Many crypto advocates would argue that government regulation of digital assets eliminates the foundation on which they were built, which is decentralization. I would say you can’t have your cake and eat it too. Although the decentralized nature of digital assets is attractive, it has enabled money laundering, theft, tax evasion, trafficking, and many other illicit activities. Not to mention people who have lost large sums of money due to lost account keys and passwords. Regulating digital assets creates a framework for the market without destroying the principles on which they were built.

Bitcoin Worth Consideration as Inflation Rises

Bitcoin has been shown to act as a store of value that is unaffected by Fed decisions or central banks. Bitcoin’s price is very volatile, but as regulation sets in, I think many more investors will feel comfortable investing in digital assets. Additionally, I believe regulation will significantly reduce the volatility seen in Bitcoin and other digital assets.

Bitcoin is particularly attractive in view of inflation because it is deflationary in nature. Inflation is the increase in the prices of consumer goods, which is usually directly related to the United States diluting the value of the dollar via money printing and, more recently, stimulus measures. The store of value like Bitcoin derives its value from market demand and scarcity. For example, gold is considered a store of value because it has a relatively high demand and is scarce.

However, there is 394 million pounds of mined gold, with 114 million pounds of reserves remaining (22.44% of total estimated supply). What I mean here is that gold is considered the norm for a store of value, but there is still a lot of gold to be mined. When it comes to Bitcoin, there are 21 million Bitcoins in total, with 19 million in circulation. This means that there are only 2 million Bitcoins left to be mined (9.52% of the total supply), and there will never be more than 21 million Bitcoins in existence.

As the United States prints more dollars and more gold is mined, almost all of Bitcoin’s supply is in circulation. Bitcoin’s blockchain does not allow splitting or printing. In short, Bitcoin is the rarest asset in the market, unaffected by central financial systems or politics, and here to stay.

Bitcoin price prediction and recommendation

Bitcoin is down 7% in the past five days, which is a relatively large drop even for Bitcoin. Considering that there are no fundamentals to use when analyzing Bitcoin, I will use technical analysis. I personally believe that the crypto market is going to the fifth wave of the “Elliott Wave” theory. Elliott wave theory is made up of five waves. Waves one, three and five are uptrends, with waves two and four acting as pullbacks. Each progressive uptrend wave must create a new high and each progressive downtrend must create a higher low to validate the Elliot Wave Theory.

Conclusion

In conclusion, the outlook for Bitcoin is excellent. The Biden administration is paving the way for the full integration of bitcoin and digital assets into financial markets and bitcoin is proving to be as good a store of value as anything else (aside from high levels of volatility). Bitcoin can act as a strong hedge against inflation, central banks, and wider financial turmoil because it is decentralized and supply is scarce.

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