Posted 9 months ago | by Ben Armstrong
According to Ari Paul, the CIO at BlockTower, hyperinflation in the established financial system could be one of the factors that drives major crypto prices to substantially higher prices.
Paul likens the current market environment to that of the 1970s, when then President Richard Nixon did away with the gold standard, and the price of gold shot from $35 to as high as $850 over a span of around nine years.
The situation today has the potential to be even more explosive. In the 1970s, the Western world had few options when it came to political alternatives to the USA. One of the biggest reasons why the double-digit interest rates of the early 1980s worked is because of the USA's primacy as a military power.
As it stands today, we have a far more multi-polar world order, and there have been repeated calls to abandon the USD as a system of coordinating global finance.
The Big Crypto Bull Market
We saw a wild blow-off top in the Bitcoin price during the last months of 2017. Of course, it only looks spectacular because we haven't seen an even bigger move up, which may be happening right now.
If the global banking authorities are dedicated to producing inflation at all costs, there is little standing in the way of a six figure Bitcoin price. With the kind of reckless abandon that monetary authorities are showing, there is no potential top price level for alternative assets, like the major cryptocurrencies.
Over the last few months Central Banks have added trillions in new money to the global financial system, and governments are spending at a level that would have been inconceivable a year ago. It is likely that these moves are only the beginning of a wild new chapter in modern money, which bodes well for Bitcoin's incoming bull run.
Keep and Eye on Gold
Something very curious has been happening in the gold market. Since the FED decided to add trillions of USD to its balance sheet earlier this year, there has been a non-stop flow of physical gold from London to New York.
Hundreds of tons of the yellow metal have been flown from London to New York, and we have never seen this kind of rush for physical gold before.
Gold might be great for mega banks that see the hyperinflationary writing on the wall, but few people actually want to use gold to buy groceries.
Cryptos are a perfect fit for buying everyday goods, and we may see a Venezuelaesque crypto economy develop in many of the developed nations that are destroying their currencies at the moment.