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One Bitcoin is equal to one Bitcoin is the new supposition as prices for the virtual currency exhibit a sharp fall.
The narrative surrounding cryptocurrencies has evolved among its supporters as values fell amid tightening monetary policy. This year, Bitcoin has lost around 60% of its value, and in recent days, its price has fallen below $19,000. Read to know more about this supposition.
The words “virtual money,” “digital gold,” “inflation hedge,” “uncorrelated asset,” and “store of value” were originally used by Bitcoin supporters to characterize the benefits of the cryptocurrency. It is a brand-new story. Each Bitcoin is unique. This idiom has recently started to circulate on Twitter during a sharp drop in prices, where users have been stating that 1 BTC = 1 BTC. It is proposed that the coin’s value is essentially irrelevant. Since its supply is set, prices should, in theory, be supported over time. According to Joshua Lim, a former head of derivatives at Genesis Trading, “1 BTC Equals 1 BTC is what Bitcoin maximalists say tongue in cheek when staring at the USD price of BTC becomes too painful.” “Just concentrate on the absolute number of BTC you own today,” the advice reads. “The implication is that BTC will someday become a unit of account.”
Anyone who has been following the cryptocurrency market is familiar with the various disguises that Bitcoin has worn over the years. Before 2022, the coin’s supporters used a variety of storylines to promote it, such as the notion that it may eventually replace gold or serve as an excellent inflation hedge. The majority of those stories have been disproved this year as prices have plummeted along with tightening monetary policy. In recent days, Bitcoin has been trading below $19,000, down from a peak of almost $69,000 at the end of 2021. This year, Bitcoin has lost about 60% of its value.
Cryptocurrency investors jumped on the notion that Bitcoin, because of its limited supply, could act as a hedge against price increases when the pandemic initially started. However, even though the prices of the majority of cryptocurrencies fell this year, consumer price pressures remained persistent. According to many market observers, investors are currently looking for a fresh narrative for the market for digital assets. The message that 1 BTC = 1 BTC is the only thing that matters has been widely shared on Twitter. Ilan Solot of Tagus Capital claims that the story put up by supporters of Bitcoin as an inflation hedge has been misconstrued. It’s inaccurate to believe that Bitcoin is stagnating as prices soar. The claim that Bitcoin tracks inflation but is not TIPS was never actually true, ” he added. Bitcoin served as a safeguard against the central banks’ reckless money printing.”
But that doesn’t mean ardent cryptocurrency investors have given up. According to statistics gathered by FRNT Financial Inc., the proportion of Bitcoin that has not been transferred for more than a year has remained constant; at 68%, the indicator is currently at its highest level since 2014. According to Stephane Ouellette, CEO of FRNT, Bitcoin is still entangled in the macro environment and hasn’t broken its association with risky assets. More often than not, “narrative tends to follow markets,” he added. “When things are connected, one way to look at it is that the traders and trading methods are the same. In the end, there is a rising and sizable proportion of Bitcoin owners who never sell their cryptocurrency and those who use it for business. BTC will eventually begin to behave differently from risk assets, but that point is not here.
But Bitcoin’s other stories haven’t come true either, according to Creative Planning president Peter Mallouk. He remarked, “It has now been shown to us that cryptocurrencies are not an inflation hedge. For everyone interested, it’s a huge, huge speculative play.