If Bitcoin ten-folds in price from its current price level, it will have a total market cap of 2 trillion dollars. That's an awful lot of purchasing power.
Since this purchasing power is conjured into existence through capital destruction rather than capital creation, nothing of value has been created in the process. A lot of energy has been consumed, but no product has been produced.
It follows then that the 2 trillion dollars worth of purchasing power will come in addition to the purchasing power already in existence through fiat currencies.
This is a classical example of monetary inflation. The money supply is expanded by 2 trillion without any form of compensation in the form of a tangible asset or service.
Should Bitcoin holders be successful in convincing retailers to accept their money as payment so that all this extra purchasing power is put into circulation, massive price inflation will follow.
I personally doubt that Bitcoin will ten-fold, and I don't think it will ever be put into circulation. However, if it should happen, the result will be dramatic. Fiat will crash and only tangible assets will be safe.
If Bitcoin becomes a big success story, gold and silver will go through the roof.
Should Bitcoin crash, as I think it will, gold and silver will also go up, because the flight from crypto will be to precious metals rather than fiat.
(Thanks to Peter Schiff for pointing this out in his latest podcast.)
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