UK banks are coming under pressure from UK Gov, but rather than UK banks, it's HMRC that are tightening the screws.
It's too late to kill crypto now - and HMRC want their slice of the pie.
There have been very credible stories that BoE are panicking and drawing up plans to get into BTC/ETH - based on their estimates of how much they will increase in value (apparently BoE think BTC could credibly head toward $1million per BTC over the next several year, with ETH not too far behind)
Also stories that BoE want to launch a UK digital pound crypto - which is completely bizarre in my opinion and defeats the purpose of crypto in the first place...it is UK Gov's/BoE's endless fcuk ups and corruption that are the main driving force behind the ongoing migration to crypto in the first place.
The rest of my thoughts here are only concerning BTC/ETH
(I don't know about other crypto - I view them as much less stable and my advice is to stick with BTC/ETH - these 2 are entrenched/established )
BTC/ETH will dip, for sure. Just like the pound/dollar. They fluctuate.
People will buy crypto on the dip because they have faith it's going to continue to grow.
So I'm almost positive it will bounce again and again and again given current environment.
The paradigm has changed over the last year, Crpyto has been mostly speculative until recently and has always been very volatile.
I think that remains the case for most Crypto - but has changed for BTC/ETH.
BTC/ETH are now viewed, by serious institutions and investors, as a legitimate hedge against inflation.
On par with gold - and possibly better (except to Gold bugs of course).
Hence ETH is at an all time high (and BTC isn't far off).
Until sometimes happens to being inflation under control - I don't see this paradigm changing.
The longer it continues, the more entrenched crypto will become. The fact that UK media are being pressured to publish so many scare stories, is evidence that it is already entrenched.
The big news this week is that US inflation at 6% and UK trending toward 5% (this is fcuking horrendous )
BoE held rates steady last week, so I think 5% is very feasible for UK. And quite possibly worse. Time will tell.
BoE are stuck between a rock and a hard place,
i) do nothing and let inflation run rampant or
ii) jack up rates to try bring inflation under control and crash the property market.
Now imagine 5% inflation per year over the next 10 years - anyone with savings is getting taxed to the tune of 50% by 2030.
Each pound you have saved is only worth 50p.
That totally changes the dynamic - people are scrambling for a hedge of some sort:
- Put that £1 into BTC or ETH and it might by worth £10 by 2030. (10x increase)
- Or it might be worth £1 (which is still 50% better than keeping it in a UK bank - where it will only lose value). (50% better than sterling)
- Or perhaps it will ultimately be worthless - but that seems hard to envisage until inflation is brought under control
The US and UK governments have taken the piss with Quantitative Easing and Modern Monetary Theory since the Financial crisis in 2008.
But what has happened since March 2020 is on a whole other level. It's obscene.
The US can absorb it, but it's not clear if we can - it seems the UK is on much more shaky ground - not surprising given that California by itself is a bigger economy than the UK.
Most of the scare stories in the mainstream media are nonsensical imo.
I believe they're mainly driven by fear and loss of control from UK Gov/BoE.
They're trying extremely hard to deter people from investing in Crypto.
Why?
The most obvious reason is that anyone investing in Crypto is removing money from a UK bank, putting more pressure on bank and much more pressure on BoE, in terms of fractional reserve and recapitalisation etc.
They're moving money out of the country, weakening the pound.
There's also the opportunity cost - they're not putting it into the property market, the FTSE, and delaying spending - possibly for years.
Basically, it's like if you stopped buying one type of gear from one source and started buying a different brand of gear directly from a lab.
You cut out the middleman so it's cheaper and you've slightly more trust since the middleman can't fuck around with you gear, relabel it, dilute it etc.
Obviously the middleman is gonna be pissed because he's totally lost his cut of the action.
Now - equate that to buying a car directly with BTC/ETH instead of having to convert it to Sterling.
You didn't liquidate your crypto - you're not liable for Capital Gains Tax to HMRC
You didn't have to convert currency - banks lost their XE surcharge
You're using crypto as a currency - confidence in the pound diminishes
You're fully capable of proving no money laundering due to crypo audit trail - UK solicitors lost their cut
etc.
etc.
The fact is - if the stories in the mainstream media were in any way balanced, they would start by
i) warning people not to invest a fcuking penny in the FTSE because it's a fucking flaming crock of shit,
ii) not to invest in UK property because it has been very artifically distorted for too long and is clearly overvalued/due a correction,
iii) and explaining to people what effect inflation is going to have on their savings (i.e. wipe them out).
I haven't seen any of this personally - but unsurprisingly turkeys don't vote for Xmas.
The other factor here - is that there is an awful lot of people who have never been able to invest/own an asset before.
Crypto (and fractionization of tokens) has allowed them to get in on the game.
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As far as what the future potentially holds right now - I've honestly no idea because everything is so unstable.
But that is typically when people try to hedge.
I've no reservations in saying this is the worst government we've seen in my lifetime.
They've gotten every major decision wrong - from Brexit to IR35.
(And trust me when I say that the people claiming the UK had a vaccine thanks to Brexit haven't a fcuking iota about Pharmacovigilance, the EU or clinical trials. But then - it's just a received opinion that most people are expressing anyway - received from BoJo or the Daily Express.)
I don't think we'll see hyperinflation, but I think it's going to get quite ugly before it starts to get better.
I also don't think we'll have a revolution in the UK - property rights are solid and despite the shrinking middle class, there are still too many people who have too much to lose.
Personally, I've been guessing since about mid 2020 that the Tories were planning to spend like crazy, redirect a nice wad to their mates, pocket a nice chunk themselves through nefarious means - and then try to inflate a large chunk of the debt away.
Not saying I've been correct - but that certainly seems to have been what has happened/is happening so far.
There needs to be a serious investigation in UK Gov - we have barely scratched the surface in terms of their corruption and it's already worse than anything in living memory.
Not to be hyperbolic - but this is how trust is eroded in the monetary and tax system and precipitates hyperinflation.
So in closing - normally I would never make a statement like this - but right now I'd seriously urge people to find some spare cash and put it into Ethereum or BTC... just in case.
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