Bitcoin vs Wall Street: The Battle for Global Market Control

Cointelegraph

I believe that Bitcoin is really more of a liquidity asset. What I mean by that is, in times of financial crisis or when liquidity gets tight, market players need to liquidate their positions, and Bitcoin isn't immune to that. Even though many people think Bitcoin is a "hedge against inflation," the pandemic proved that in uncertain times, Bitcoin gets sold off by investors looking for quick liquidity, just like any other risky asset.

When short-term interest rates rise, money is drained from global markets. Higher interest rates make investments in central countries, like the United States, more attractive, and investors pull capital from emerging markets and riskier assets like Bitcoin to secure safer returns. Additionally, the rise in global credit costs reduces access to cheap financing, slowing economic growth. In times of liquidity crises, risk assets, including Bitcoin, are the first to suffer from massive sell-offs in search of cash, proving that, in practice, it is also vulnerable to such situations.

Furthermore, with the entry of large players such as BlackRock, banks, and some hedge funds into the Bitcoin market, I believe it will lose its role as a "decentralized currency." These financial giants are building astronomical positions, and they have the power to steer the market where they want. This, not to mention sovereign wealth funds and governments themselves, who are building Bitcoin reserves. If the United States, for example, were to create a Bitcoin reserve, the impacts on prices would be unimaginable. These players could deliberately distort the market, creating a dynamic where the traditional financial system and Bitcoin's decentralized structure collide. With so much power concentrated in the hands of a few, the market could become highly manipulable, and Bitcoin would cease to be a true decentralized store of value, losing the essence that made it attractive in the first place.