Over a long enough time horizon, the price of Bitcoin won’t matter, but if you are a business owner, that needs to keep the business solvent and support your suppliers and staff. A drop in the price is a risk that needs managing, and therefore it is worth knowing when the end of the hype cycle could be nigh.
Governments are creating additional currency using quantitative easing and other tools at their disposal to deal with the pandemic crisis. But what if these tools were to break? The unfolding drama with the Evergrande property company could be a Lehman moment for China that reverberates worldwide. Perhaps the tools that the central banks have access to will avert yet another crisis – but then again, what if they won’t this time? It may be wise to hedge your bets as a consequent sudden removal of liquidity from the markets would impact all such assets – including Bitcoin.
Nottingham University Lecture
Watch my explanation of Bitcoin given to the postgraduate students at the University of Nottingham in May 2021.
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