April 24, 2021
Inflation threatens to tear the dollar down, the Fed’s not touching interest rates until 2024, and the Biden administration can’t stop spending trillions… Honest Americans’ savings could erode in the next few years, and the U.S. is due for a historic economic reckoning.
But on a brighter note, have you been following bitcoin? Despite the recent volatility caused by Biden’s insane plan to hike capital gains, bitcoin is still hovering around $50,000.
Folks are fearful of mass inflation… Could the crypto alleviate some of the aforementioned financial pain for investors? And with the perfectly timed Coinbase IPO, crypto novices can now enter and play the blockchain sector without owning any cryptocurrency.
Just as my recent episode with Eric Wade illuminated bitcoin benefits for your portfolio, with eased retail investor access and relative price stability at the moment, is this the time to act bullishly on the crypto investing zeitgeist?
On the American Consequences podcast this week, I spoke with Daniel Roberts, Editor-in-Chief at Decrypt. He elaborates on how Wall Street and Washington now grapple with the undeniable financial force of crypto and whether bitcoin will remain 21st-century gold or ever transcend into a mainstream currency.
Daniel’s covered cryptos for the past decade, so he’s steeped deeply in the codes of this world and fervently believes in the inevitability of bitcoin as a fiscal mainstay.
While he admits its relative volatility, noting the stock price could spike to $80,000 or easily drop back to $40,000, he claims there’s one certainty with bitcoin: it’s never going to zero. That hasn’t happened in the more than a decade it’s been trading. It’s here to stay…
The pandemic response has perfectly set the stage for this crypto craze. With trillions pouring in from the Fed, stimulus money abounding, and low-interest rates for the foreseeable future, Americans are wary of the fate of the U.S. dollar looking for ways to hedge against inflation: one of bitcoin’s top value propositions.
It’s a digital-only asset with a capped supply of 21 million — the market’s not going to flood with more bitcoin suddenly.
OK, so bitcoin’s undeniably a hot investment. But will we be buying our kids’ school supplies or paying off our mortgages with cryptos anytime soon?
As Daniel reminds us, the core crypto kernel of having a currency not backed by a central bank has always been part of bitcoin’s lore and egalitarian appeal. And the holy bitcoin scroll, Satoshi Nakamoto’s original bitcoin whitepaper, detailed the purpose of the blockchain-tech to be a peer-to-peer electronic cash business – but that’s not happening at the moment.
Companies like Tesla and PayPal claim customers can pay in bitcoin — who would want to do that right now?
The digital asset’s finite and surging in value — that’d be akin to a mining San Francisco forty-niner throwing golden nuggets on the bar for a beer instead of paying with the pennies in his pocket.
He agrees with Mark Cuban’s sentiment that at this moment, bitcoin’s still stuck as a glorified store of value — but there are worse things to be in the financial world. And it may not evolve past being gold 2.0. Hear Daniel’s top crypto picks to become currencies.
Blockchain: A Lesson in Digital Safety
In terms of vulnerability, Daniel attests that bitcoin comprises open-source code (anyone can view it on GitHub), but that its blockchain code is composed of hundreds of thousands of nodes invested in the network, and any tweaks to the code get eliminated instantly.
He notes that in the headline-driven crypto market, you’ll see a clickbait piece about hacking now and again — but that’s always an obscure crypto getting infiltrated, never the immutable ledger that is bitcoin.
And since bitcoin’s a decentralized network, you’re not a slave to Amazon Web Services (AWS), no longer at the mercy of Big Tech whim or hasty government mandates. The selling point of holding crypto is digitally verifiable scarcity and proof of ownership.
Daniel explains it’s an asset that cannot get lost, copied, or stolen — on a peer-to-peer chain that no one can touch (barring user error).
Few people in America have Dr. Paul’s insight into the inner workings of the government, which is why you need to see his latest warning.
Regarding crypto privacy (or the lack thereof), being a part of a financial network where everything’s traceable doesn’t faze the Reddit investing generation. Growing up in the shadows of Silicon behemoths Google, Facebook, and Apple, they have no illusions of privacy and begrudgingly accept it as a Faustian trade for digital access.
And the fact that users don’t need high-speed sparkling 5G is another testament to the democratic undercurrent of bitcoin, explaining its soaring popularity in lesser-developed parts of the world. In underbanked nations like Nigeria, where citizens may not have a checking account or personal computer, people increasingly accept cryptos as payment — as all you need is a smartphone.
There’s a caveat to all of this — one immutable fact for bitcoin. If you don’t have Internet access, you’re not getting your money.
Buttoned-Up Bitcoin and The Crypto Cold War
Billionaire investor Peter Thiel recently mentioned that China could leverage bitcoin as an enemy of the U.S. dollar. Geopolitically speaking, the Red Dragon’s breathing fire down our white collars, threatening us as the holder of the world’s reserve currency.
Daniel says that’s all the more reason for Washington to embrace bitcoin. China’s already ahead of us in mobile payments, and they’ll soon take the bleeding blockchain edge in crypto innovation with their state-backed ChinaCoin, and that we need an equivalent…
Why is the U.S. government not more involved in the creation of a digital currency?
As soon as you say banks aren’t involved, most in Wall Street and on the Hill have already stopped listening.
Silk Road PTSD also has the American government anxious about illicit activities orchestrated with cryptocurrencies — but what’s funded illegal arms or narcotics trafficking for decades? The U.S. dollar.
If the American government has a digital dollar, citizens will seek ‘stable coin’ cryptos — ones pegged to the U.S. dollar, reducing wild price fluctuations. The crypto purists would roll their eyes at this measure, but the skeptics would feel assured if there was government backing and buy-in — a sense of old-school security and legitimacy.
And with new SEC chair Gary Gensler (who taught crypto classes at MIT), there’s a sense of optimism around his formal embrace of bitcoin regulation.
Either way, the promise of crypto always delivers faster, friction-free transactions — instant payments with nominal fees.
The Bitcoin Buy-In and Dodging Dogecoin
So, if you want to buy bitcoin, what’s the best route for an investor?
Daniel insists Coinbase is as close to a household name for bitcoin exchanges — RobinHood and PayPal are also alternatives while the SEC looks to approve a bitcoin ETF.
And who’s to say there won’t be another crypto disruptor to overtake bitcoin? For now, Daniel says the main two that have staying power are bitcoin and ethereum — the rest may evaporate in five years.
A likely crypto casualty includes the unending laugh of Dogecoin (up 18,000%), which Daniel generously calls a “wrinkle in the crypto space.” But every joke has a punchline: this one is losing all your money on a meme stock.
Listen, crypto is the future — we’re not going to forever live in a world where we’re schlepping around credit cards and cash. And bitcoin may remain this generation’s gold while a U.S. digital dollar ascends – no matter what, the face of money is no longer that of a Founding Father but rather an anonymous letter.
With overzealous Fed spending and inflation already here, Americans need to protect themselves financially and hedge their investing bets. Freedom is money and vice versa — and crypto might be your great emancipation.
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Publisher, American Consequences
With Editorial Staff
April 17, 2021