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Over the last few days, there have been reports about a handful of companies converting some portion of their cash on hand into Bitcoin, with them citing it offering a better alternative to cash for their savings. With the dropping of interest earnings on cash held in banks over the last years to the point of many turning negative, with most negative when adjusted for inflation anyway - this might become a common trend. Especially since to deal with the Covid-19 panpanic, governments have been generating massive amounts of cash from their "thin air" reserves and injecting it into the economies globally, which will lower the buying power of fiat even more rapidly.

Now, it is of course interesting to think what might happen to the markets if all companies put a percentage of their cash on hand into Bitcoin - For example, Apple could buy 2 billion dollars worth of Bitcoin, and that would represent *only one percent* of their total cash on hand, which is over 200 billion currently. Google has 100 Billion, Microsoft another 150 billion on hand. One percent of the three companies cash (about 5 billion) being converted into Bitcoin would only represent about 3% of the total BTC current market cap, but remember that most of the Bitcoin out there *isn't for sale* at these prices.

![OI000709.jpg](https://files.peakd.com/file/peakd-hive/tarazkp/jDB6kPvg-OI000709.jpg)



Then there are the funds out there to consider and if the largest of them BlackRock, decided to put 1% of their investment into bitcoin, it would be around *65 billion* worth, or around 25% of the total Bitcoin market cap. That is using only one percent of their fund. How high would price climb if 70 billion in *new money* poured into Bitcoin where the majority is probably currently locked up in cold storage?

So, while the companies who make a move now are looking for storage value, they are also *potentially* front-running the larger players to come and if they do arrive, they are going to *come hard.* 

What is happening however is what needs to happen for the crypto economy to not only mainstream, but become the economic infrastructure to replace the broken system that is currently circling the bowl. This is the process of *value transfer* that for years has been going from the bottom to the top, but now is beginning *to fork* away from the traditional economy itself and onto blockchains. 

When a company moves their reserves into an asset, they of course want to keep that stockpile growing - this can be done through earning and conversion, or it can be done through *earning alone,* meaning that rather than go through the middleman processes that have effectively cut them out of earning on their cash reserves, they can start doing business directly on the chains and earn in a cryptocurrency. The more this happens - *the more it will happen.*

As value starts gets converted onto the chains and into a far more flexible and mobile asset class, it means that the traditional system is essentially going to have more of the inflation released into the economy, speeding up the process of demise and collapse. Not only this, with companies generating cryptocurrency value rather than going through the middleman centralized currencies, they will be constantly reducing the volume on fiat and it will get increasingly more volatile, driving *even more* companies and people to look for financial safe havens - and with gold in limited *real supply* and people not trusting the "on paper" ownership of it, they will look for something they can *own* and *trust.*

This creates a very big problem for governments as their currencies start to fall slowly into disuse and what is getting used is a global digital currency (or large set of interoperable currencies) that are not owned or controlled by any single authority. This effectively hamstrings a great deal of their current activities and rather than being able to automatically extract the value they want, they are going to have to ask very nicely for it. Governments have so much control because it is they who have a stranglehold on the flow of value - but the cows they milk are starting to move to greener pastures. 

While I don't think that this is going to be an overnight tidal wave move, the groundswell is building momentum in the far depths and things *are starting* to move. When a market collapses, investors want to get out as fast as possible to maintain the most value they can and move it into an asset that will store that value - but, because of the rush, that storage vehicle will get pressured upward to *add value* to those who moved first. 

This means there is double the first mover advantage and incentive - get out of fiat early, get into Bitcoin early. If this happens, there would be a crash in fiat value and the markets of unprecedented proportions because unlike earlier crashes, the investors won't return, they will *abandon* the vehicle altogether - and leave it a burning wreck on the side of the chain. 

People are quite mistaken about the rich and the corporations only caring about money - because they don't care *at all* about money. What they care about is what money buys- not happiness - power and security. But the *buying power* of any currency is the demand on that currency and with demand slowly shifting away from fiat and onto blockchains, the rich will drop usage as fast as they can, as it no longer satisfies their need for power and security. They don't care if they have dollars, rubles, gold, bitcoin or chicken feathers in their holdings - as long as it has purchasing power. 

What we are watching slowly happening is the decommissioning of a currency, which isn't an uncommon event when the inflation becomes ridiculous or for other reasons - except normally it is the same authority that replaces the old with the new. This way, they hold onto the reins. If companies start moving into Bitcoin, the reins have been broken - fiat currencies become obsolete in a way they have never become so before. 

I predict the pushback is going to be more than firm on this as no government wants to lose control over the one thing with which they can control their people through a centralized economy of reward and punishment - where they are judge and jury.

Taraz
[ Gen1: Hive ]


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Posted Using [LeoFinance](https://leofinance.io/@tarazkp/the-start-of-the-end-for-fiat)