With Cash Being Printed for Fun, has Bitcoin’s Time Finally Come?

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Bitcoin’s reaction to the global market crash has so far been unsurprisingly negative, but with the US now embarking on a huge financial stimulus program, some prominent voices are calling for Bitcoin to rise up as the ultimate non-governmental asset.

When in Doubt, Print More Money

US Treasury Secretary Steve Mnuchin’s claim last week that the Treasury and the Federal Reserve were working towards providing “unlimited liquidity” for troubled businesses and households during the current downturn sent shockwaves through the financial sector, and reinforced once more just how much of a runaway train fiat money has become.

In response to this, some Bitcoin supporters have professed that his endeavor marks a turning point in the importance of Bitcoin as a deflationary asset unconnected to any governing agency:

Is the Balloon About to Pop?

It is a natural response in times like this to print more money, for a number of reasons – firstly, it calms investors’ and banks’ nerves, and secondly it helps to physically shore up companies at the risk of going bust. However, the printing of money is a delicate balance, a yin and yang between money printing and adjusting inflation to make sure the balloon doesn’t fly so far away that it pops.

It is this popping of the balloon that critics of the “unlimited liquidity” method are concerned about. Currently, investors are running from equities and commodities into cash, resulting in the US dollar lording it over all other currencies.

This has only stoked fears of a global credit crunch, which in turn leads to further selling of stocks and other assets, with even traditional safe havens such as gold and US Treasuries suddenly coming under pressure. That in turn adds to demand for dollars, creating a vicious loop.

Bitcoin Solves This

Bitcoin, on the other hand, has certain advantages over fiat currencies that many either don’t understand or choose to ignore. Simply put, it cannot be printed ad nauseum to prop up a failing system – it has set rules for when and how much can be released into the system in order to avoid abuse.

This is the opposite of the dollar, which is on the verge of being printed, and therefore debased, in quantities we have never seen before.

Not Everyone is Buying It (Literally)

Not everyone is convinced that Bitcoin’s time has come however:

This is an understandable point of view given that Bitcoin is still an unknown quantity among most investors and, for very sensible reasons, is not to be trusted during a financial apocalypse.

When we emerge from the other side however, Bitcoin should still be around, which will hopefully lead to more of the population taking the chance to at least explore it and learn about why it is the perfect antidote to the government money printing machine.