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Screenshot of a breaking news alert e-mail from Q2 2017
Up until recently, national banks and governments enjoyed a full monopoly over people. With the rise of cryptocurrencies and the sharp rise in fintech, “people’s currency” is becoming more and more popular around the world. However, the monopoly over money has become a serious issue for both institutions and big-time CEOs. As a result, the price of Bitcoin hit new lows, marking a drop of 40% from around $5000 to $3,080 price level. The fight seems to be real, as China is shutting down exchanges from trading bitcoin by the end of this month, India has stated their “fear” of an unregulated currency and even the big American banks, like JP Morgan Chase slandered the cryptocurrency as a “fraud”.
According to a survey from WallStreet, Bitcoin is one of the “most crowded” trades. The Bank of America Merrill Lynch (BAML) surveys around 200 fund managers with total assets under management (AUM) of $630 billion. According to Coin Telegraph: “26 percent of the fund managers surveyed believe that Bitcoin is the most crowded investment right now.” More importantly, the survey shows the long-term trust of “smart money” in Bitcoin and its value. Most investors believe that the current drop in Bitcoin price is just a blip and that the value of the cryptocurrency will continue to increase over time.
With such a cryptocurrency craze going on, governments can lose money from being unable to print more and more money, which can in turn, affect taxes, and ultimately, the control of the whole economy. With the public eye often turning to the Financial Crisis of 2008, which was triggered by the biggest US banks, people are losing trust in financial institutions and seeking ways to get access to liquid markets quickly. So, the question of whether Bitcoin can subordinate the monetary system is not clear yet, though the fear in the market is real.