First used by states after World War II, this covert form of taxation allows authorities to cheaply finance deficits, gradually erode the real value of debt burdens through moderate inflation, and avoid the relatively harmful options of outright default or severe austerity. (Other debtor countries, such as the US, UK, and European countries, may soon take similar measures.)
This environment creates a strong incentive to seek assets with limited supply that can maintain purchasing power, such as Bitcoin and gold. $BTC has already proven its capabilities. Home prices measured in Bitcoin look much cheaper than measured in dollars.
But there are also short-term risks worth noting. GPIF holds $931 billion in foreign assets, including $232.1 billion in U.S. Treasuries. A small diversion of capital into local assets could create turmoil on Wall Street, create risk aversion, and trigger sell-offs everywhere in the market, including cryptocurrencies.
But for now, Bitcoin is performing well, trading above $64,000 and key momentum indicators pointing to another bullish shift in market trends. There are a few more important levels between $65,000 and $80,000 that the price needs to clear before a full-fledged uptrend is confirmed. Be alert!
More information: For an analysis of today’s activity in altcoins and derivatives, see Today’s Crypto Market. For a comprehensive list of this week’s events, see CoinDesk’s “Crypto Week Ahead.”
