From Bold Predictions to Pandemic Paradigm Shift:

👋GM DeFions

Key Points

• Early predictions for high valuations of Bitcoin seemed unrealistic, but were based on theories about specific scenarios.

• The pandemic in 2020 exposed flaws in the banking system and led to a loss of confidence in traditional banking institutions.

• Over-leveraging assets worked in a low-interest rate, free money economy, but not in a climate of high-interest rates and continual raises.

• Bitcoin and other cryptocurrencies may become a more viable alternative to traditional banking institutions as their flaws become more apparent.

In the early days of Bitcoin, when it was first introduced, people were talking about extremely high values for it in the future. The original Bitcoiners were discussing unfathomable valuations for Bitcoin that seemed impossible at the time. One of the first numbers that people talked about was $40,000 per coin. Although this may not seem like much now, since the all-time high has eclipsed that by about $30,000, at the time it was a bold prediction.

However, it was difficult for rational financial thinkers to take these predictions seriously, especially since Bitcoin's value was fluctuating so much. The volatility of the cryptocurrency market made it hard to predict the future of Bitcoin, and the idea of such high valuations seemed unrealistic. For content creators and investors who were hearing these predictions, it was hard to see how they could ever come true.

Despite the skepticism, the predictions of extreme valuations for Bitcoin were backed by theories about how specific scenarios could lead to such high values. Over time, people started talking about even higher values for Bitcoin, with predictions of 100k per coin or even $1 million.

However, the pandemic in 2020 was a turning point that changed the game for Bitcoin and the financial industry as a whole. The pandemic exposed flaws in the banking system and led to major banks failing. This revealed that the fractional reserve banking system was fraudulent and bankers were over-leveraging assets.

In a low-interest rate, free money economy, over-leveraging assets could work. However, in a climate of high-interest rates and continual raises, this strategy became less effective. As a result, the weaknesses of the banking system were exposed, and people began to question the viability of traditional banking institutions.

For Bitcoin skeptics, the idea of a decentralized currency that is not backed by any government or institution may seem risky or even ludicrous. However, those who dive into how the system works may begin to wonder if there is a better alternative. As the flaws of traditional banking institutions become more apparent, Bitcoin and other cryptocurrencies may start to seem like a more viable option for those looking for an alternative to the traditional banking system.

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