Sandra Phlippen of AD Newspaper, owned by a Belgian private news company, in the Netherlands is imploring citizens to spend all their Bitcoin now in order to avoid the supposed inevitable crash. The Economist states that Bitcoin is building to a point where, when – not if – it crashes, it will be so big that it would destabilize the real world economy.
The argument goes that Bitcoin is already a threat to government and undermines the central authority of banks in sovereign states. Thus, as it continues to grow, it will cause irreparable damage to the economy, and again when – not if – it collapses, she states, the damage will be gigantic.
The recent growth spurt has got many people talking on both sides of the Bitcoin. Some are elated at the adoption and the associated price jump, while others are fearful of just how high the roller coaster goes.
Phlippen argues that, with information sourced from Joshua Brown, a New York financial advisor, on his private blog, that Bitcoin needs $17 mln a day to carry on without crashing. As more and more interest flows towards Bitcoin then, it is argued that that figure will rise. But because it is still such a new market, it could start to miss the predicted magical figure.
“Speaking of the dot-com boom, I think this is the same thing. The people who are buying into this mania most heavily, in an emotional sense, were in elementary school for that.”
Undermine the government
Phlippen’s biggest fear of Bitcoin, however, is that it undermines the government. She spouts the usual rhetoric about tax avoidance and money laundering. Additionally, it is a concern, she states, that the additional revenue that comes from Bitcoin’s growth in citizens’ wallets cannot be used to benefit the centralized government. It is the issue with gains tax and the anonymity that is empowering citizens that is unpleasant to the author.
The central bank imbalance
Not only does Phlippen highlight the plight of the government when it comes to a big Bitcoin market, but she also has concerns for the banks too.
“Central banks also have less influence on keeping the economy stable. In times of crisis, central banks can, through their influence on ordinary banks, ease credit conditions and encourage people to consume. The bank has no control over the Bitcoin economy and an economic crisis can become deeper.”
What to do?
Through all this doom and gloom of Bitcoin getting so big that it eventually reaches its breaking point and blows, along with the rest of the world economy, Phlippen’s advice is: ‘sell.’
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