Sure – hindsight may be 20/20, but Jack Mallers thinks Bitcoin’s latest plunge isn’t a big surprise. Despite the jaw-dropping 46% drop in a single 24-hour period that pushed Bitcoin off a cliff to levels not seen since March of 2018, Mallers, founder of the Bitcoin Lightning wallet Zap, says the current cracks in the financial system leading up to the stock market sell-off, along with Thursday’s subsequent $1.5-trillion cash injection by the Federal Reserve to stave off a broader collapse, is precisely why Bitcoin was invented.
In a tweetstorm triggered by a remark made by Coinbase CEO Brian Armstrong, who expressed his surprise over Bitcoin’s recent nosedive, Mallers lays out why the king coin can have a comeback.
“Anyone relatively familiar with money management and markets should not be caught off guard by Bitcoin’s recent move to the downside. When a crisis punches you in the face, you find shelter in your winners. When cash begins to disappear, you run and grab your rainy day fund.
BTC is the best-performing asset since its inception, still up 50% YoY today. It has gone from $0 to $20,000 since our last financial crisis. For many, cash is disappearing. The world is very illiquid right now. Bitcoin’s generational performance is a rainy day fund for some.
I’m hearing many popular (non-crypto) hedge funds are completely blown out and traders are being told to close down their positions. They need cash. This is the reason Gold is down as well. BTC is still a tad bit too young to absorb such a global liquidity crisis without pain.
However, what we are experiencing now is why Bitcoin was invented. As the Fed steps in to repo markets in a panic, and with cutting rates and QE [quantitative easing] on the horizon, the soundest money mankind has ever encountered becomes more and more attractive by the second.
In 2008, even Gold experienced 30%+ downside pressure before continuing its rally, eventually pushing forward to all-time highs, topping in 2011.
Bitcoin will be no different. Once those that needed their rainy day fund got it, they’ll be gone as quickly as they came.
Believe it or not, for those that have been around for some time, this is is right on script.
Months before the halving, a crisis, and a gut-check, right before the world needs Bitcoin more than it ever has.
If you’re leaving now, I’m not entirely sure why you came.”
Mallers, a Bitcoin developer who also launched Zap’s new fiat on-ramp dubbed “Strike” earlier this year, says Bitcoin’s tech is still sound despite the market mayhem and the threat of the coronavirus outbreak.
“My full nodes are still receiving blocks every ~10 minutes, with 12.5 new bitcoins in them. I know what the supply of BTC will be tomorrow, next year, and in 100 years.
I’m not ‘disappointed’ in Bitcoin in the slightest. In fact, I’m excited, it’s working when we need it most. Being part of the greatest modern-day wealth transfer is earned, not given.
Do your own research and act as you please, but don’t let fools fool you. Nothing about Bitcoin should come as a surprise to those familiar. Markets being markets, the Fed being the Fed.
Lastly, in such a tough time, Bitcoin isn’t even the priority.
This community is one big global family, and my thoughts are with every one of you.
I love you all and wish you and your loved ones well and good health in this tough time. Sending my thoughts and prayers.”
Featured Image: Shutterstock/Yurchanka Siarhei