Despite its volatile past, bitcoin has stabilized recently as it floats above USD 36,000 on strong U.S. GDP performance. As the US federal deficit is growing rapidly, it will be increasingly difficult for the Fed to halt the inflation rate. The resulting compounding problem will further increase the importance of Bitcoin. Its volatility is no longer a cause for panic. It is now the prime reason to get excited about cryptocurrencies.
A recent survey by Deutsche Bank showed that half of 627 market experts rated Bitcoin as a speculative bubble, the highest-ranking of any asset. These investors expect a speculative implosion in the next few years and mainstream acceptance in 2020. As a result, the price will fall further in the future. In comparison, the top 1% of dollar holders controlled 30% of all US household wealth, and the top 1% of Bitcoin holders will have a piece of the pie by 2020.
El Salvador has announced plans to make bitcoin a parallel legal tender. The move to make bitcoin legal tender in El Salvador raises legal, financial, and macroeconomic issues. The acceptance of bitcoin as legal tender is likely to put more pressure on the dollar and cause more US Treasurys to flee. Further, this move is unlikely to happen without government intervention. The IMF has already raised concerns about the adoption of bitcoin as a parallel legal tender. Foreign investors have started to demand higher premiums for their country’s debt and are now wary of any further restrictions.
The emergence of private currencies as reserve assets is a good thing for the United States. It can protect Americans’ savings from the mismanagement of the federal government. Moreover, it can boost the prosperity of American youth by ensuring financial security for the vulnerable and young. It is one of the fastest-growing asset classes and could soon be a major currency. So, it’s time for the US to get on the bitcoin bandwagon.
Whether bitcoin will replace traditional currency or not is another matter. While it is certainly an alternative to cash, it does not have to be a substitute for everyday cash transactions. In fact, a large number of people don’t even pay for coffee with bitcoins, but rather with gold bars or Treasury bonds. So, there is no need for a central government to intervene and regulate digital currency.
The US is experiencing a strong economic recovery, and Bitcoin has grown significantly in value, too. The value of gold was at an all-time high of $600. Today, the price of bitcoin surpassed USD 36,000 for the first time. Its rise suggests that the US economy is now a stable and growing economy. However, it is unlikely to go beyond USD 36,000 anytime soon.
The recent surge in interest in bitcoin has resulted in a number of positive developments for the US economy. Notable investors, companies, and retail traders have flooded the market with digital currency. The United States is already a leading global economy, and it is important to ensure its success. If Bitcoin becomes the primary currency of a nation, it will likely become the main source of wealth in that country.
Early developers of Bitcoin drew inspiration from the Austrian School of Economics. Ludwig von Mises, a well-known Austrian economist, firmly believed that monetary inflation violated property rights. The Austrian school argued that central banks could not trust citizens and should not debase their currency. He hoped to create a digital currency that would give citizens the power to control their own finances and make their own decisions.
As long as the US economy continues to perform well, it is essential to monitor the currency’s performance. The price of a certain currency will go up or down in response to the strength of the US economy. However, the US central bank can float a currency to the top of the market to avoid a recession. It is a symbol of the country’s strength and its ability to keep its economic growth up.
About Post Author
