- Bitcoin no longer functions as a useable currency
- The “unlimited cash printing by governments will destabilize traditional currencies
- Bitcoin has come of age as the perfect hedge against economic collapse
Bitcoin has suffered something of an identity crisis ever since its impracticality as a day to day currency was exposed during the 2017 bull run, but the response of the US Treasury during the ongoing coronavirus pandemic has helped solidify Bitcoin’s true raison d’être as an independent store of value.
Bitcoin as a Currency Was Exposed in 2017
Bitcoin’s primary use case has always been hotly debated, with some arguing that it is designed to be a government-agnostic and borderless currency to be used for everyday purchases, while others see it as a store of value like gold and a hedge against traditional financial instruments.
Among the many lessons that the 2017 bull run taught us about Bitcoin was that it’s potential as an alternative currency was something of a fantasy – bogged down by the heaviest use the network had ever experienced, transactions times rocketed to hours and even days, with transaction fees moving with them as those wanting to use the network paid more and more to get their transactions prioritized.
Fast forward three years and, barring the introduction of proprietary systems like Bakkt to take the pain away from Bitcoin’s lengthy transaction times, nothing much has changed that would make Bitcoin any more suitable to a sudden usage surge on its network.
Bitcoin ‘s Use Case Solidified as Money Printer Goes Brrrrrrr
However, something has changed that pushes the pendulum firmly in the ‘store of value’ proposition for Bitcoin – the coronavirus. Or more importantly, the US Treasury’s reaction to it. In response to the looming economic disaster presented by the coronavirus pandemic, the Federal Reserve has said that there is an “unlimited amount of cash” on hand to help America through what is to come, with figures of $10 trillion being touted as the potential bill after all is said and done.
In promising endless money printing, the Fed has ended the debate on Bitcoin’s use case. The path that injecting trillions of dollars into the economy will likely take America down has been loudly projected by economists and commentators all around the globe.
The Washington Post for one has said that we could see “a boom-and-bust economy in which the level of indebtedness, the depth of the recession and the size of the government rescue increase with each cycle…” Forbes meanwhile has accused Donald Trump and the Federal Reserve of “destroying the US dollar”.
Bitcoin the “Perfect Hedge”
Other opinions on the actions being taken have come via Robery Kiyosaki, author of the Rich Dad, Poor Dad series of educational financial texts, who has said that Bitcoin is now the perfect hedge against the “dying” dollar. Raoul Pal, CEO of Real Vision Group, echoed those thoughts this week when he said that traditional markets were now facing a “long, drawn-out bleed” and that Bitcoin represents “the future”, adding that it could hit $1 million in 3-5 years on the back of what we are seeing now.
This future does not need Bitcoin to be used as a means of buying your groceries, paying your rent, or receiving your salary. It needs Bitcoin to be a bastion of independence, somewhere to put your savings where the actions of a government that doesn’t think past the next election cannot negate its value with its short-termism.
Bitcoin Has Finally Come of Age
The reasons for the sudden reemergence of six and even seven-figure predictions for Bitcoin at this time are no coincidence. They are a reflection of what is happening right now in the world and how the leaders of the globe’s financial superpowers are handling it.
After 11 years of searching for its true place in the world, Bitcoin has finally come of age.