Image Source – Bitcoin or Gold, which would you prefer?
Source: The Fed – The monetary base could reach $10-$12 Trillion as the Fed goes through with its unprecedented lending program.
Source: The Fed – Numbers are in trillions and illustrate that the Fed’s balance sheet has nearly doubled just since the beginning of this year.
To complicate matters further, U.S. Federal spending budget is about $3.4 trillion in the red, and national debt to GDP ratio is approaching 120%. Furthermore, it is not just the U.S., as fiat currency debasement has essentially become the norm all over the globe. Due to the continuous debasement of global fiat currencies, Bitcoin (BTC-USD) and other inflation-resistant digital assets should continue to experience increased demand and further price appreciation.
The Fed Connection
As the Fed perpetually increases the supply of dollars around the world, assets such as Bitcoin and other promising digital currencies should go a lot higher.
This is effectively the same phenomenon that gold and GSMs have benefited from. Ultimately, the trillions of dollars created by the Fed will filter through to the real economy, which will very likely lead to inflation, loss of purchasing power, and possibly even a loss of confidence at some point. QE unlimited is not going unnoticed, and market participants are beginning to understand that there is no returning to the old normal. There is only the new normal now, and it is filled with incredibly easy credit, rock bottom interest rates, and essentially limitless amounts of capital provided by the fed.
Even Goldman Sachs (NYSE:GS.PK) is hosting a conference on inflation, crisis, and Bitcoin, which is a positive development for the crypto industry in itself. This is telling that major organizations and the “smartest guys in the room” are starting to recognize potential in the digital asset industry due to massive fiat devaluation.
Additionally, the current fiat financial system is filled with faults, redundant charges, and inadequacies. Therefore, banks, large institutions, as well as retail consumers/investors could start to utilize digital assets on a mass scale within the next several years.
So, what is a Digital Asset?
I want to clarify what a “digital asset” means to me. Whether it is Bitcoin, Ethereum, Litecoin, etc., a digital asset is a unit of value. Moreover, this unit of exchange represents your share on a given blockchain network. You see, every cryptocurrency/digital asset has its own protocol and its own blockchain. Additionally, each blockchain project/network has a specific role to play in the ever-evolving digital payment and services industry. Every project essentially consists of a form of a medium of exchange, its own blockchain system, and a very extensive infrastructure to…