Bitcoin In Free Fall: The Beginning Of The End?

You know, I keep hearing about how governments can’t shut down Bitcoin.

And about how regulators can’t put the brakes on the crypto train.

And about how this horse has left the barn no matter what some out-of-touch stuffed shirt from Allianz tells you.

And about how Jamie Dimon is just “worried” about his job which the crypto crowd imagines is in serious jeopardy thanks to the rise of alternative “currencies.”

Come hell, Gandalf, or high water, Bitcoin is going to $500,000, thus ensuring John McAfee doesn’t have to pull a Steve Bannon on national television.

But here’s the thing: governments can do whatever they feel like doing. And no dark web or space age technology is going to stop them. In fact, there’s a strong argument to be made that the more advanced the technology and thus the more woefully behind the curve government is in terms of reacting to the shift to cryptocurrencies, the more draconian will be the government’s response.

We got still more evidence of that on Friday when Bitcoin fell as much as 11.6% after China apparently told regulators that it aims to stop exchange trading of cryptocurrencies by the end of September.

“Regional Chinese regulators were notified of the timeline by a central bank-led group overseeing Internet finance risks,” Bloomberg reported overnight, citing unnamed sources. “The notice suggests Chinese policy makers will move quickly on a previously reported plan to end exchange trading, their most far-reaching measure to rein in the growth of cryptocurrencies.”

Just to reiterate what you probably already know, this P.O.S. is down something like 35% in just six days.

really solid month for bitcoin

lol

— Heisenberg Report (@heisenbergrpt) September 15, 2017

And before you go reminding me about how it’s still up ‘bigly’ on the year, first note that I know that just like everyone else knows it. Second, note that the precipitous decline we’ve seen this month is now readily apparent on a chart – and when a decline is readily apparent on a chart of an “asset” (if that’s what you want to call it) that has rallied as hard as Bitcoin has, that means something has gone horribly awry (i.e. this isn’t a “blip” on the proverbial radar screen anymore):

We continue to believe that when this is all said and done, the irony will be that you didn’t need to know anything about Bitcoin to predict its demise. All you had to know was that governments will do what governments have always done when faced with an existential threat.

Oh well, it was fun while it lasted…