Regardless of all the skepticism surrounding the Crypto world, the supporters believe that the world will see the benefit of cryptocurrency the most during the next financial crisis.
According to many anti-establishment figures, consumers, and qualified and reputable economists, the macroeconomy could be on an imminent verge of collapse. Narayana Kocherlakota, the ex-president of the Federal Reserve’s Minneapolis arm reportedly warned his former employee to prepare for a crisis in a recent Bloomberg op-ed. The CEO of Shapeshift, a major cryptocurrency exchange platform- Erik Voorhees commented on his thoughts regarding this. According to his “tweet” on the social media of Twitter, Voorhees believes that the largest cryptocurrency by market cap- Bitcoin might be a potential “escape hatch” from the situation when the time comes. Bitcoin can be a potential escape from the shackles of the centralized systems.
There has never been a global recession since Bitcoin was created. Next time it happens, there is an escape hatch. https://t.co/XmwcCcuSU9
— Erik Voorhees (@ErikVoorhees) April 16, 2019
This is a time when the mass would soon probably lose confidence in big financial institutions with a third party handling their business and instead rely on something that is totally under their control.
Despite the fact that the economy looks to be quite balanced currently, some signs might suggest a disorder in the system about to happen. For instance, The US Treasury Bond yield curve had a negative spread happen between the three and ten-year notes. Looking back at history, this has been an antecedent of the recession. On top of that, the sovereign debt is at its pinnacle. It has been reported that since the 2008 crash, all forms of debt have increased by several trillions of dollars in their nominal value while central banks worldwide are looking to improve their balance sheets, and firms increasingly borrowing to accelerate growth.
Ikigai chief executive, Travis Kling shares Voorhees’ sentiments as the world is marching towards the next global recession. Kling commented on his thoughts, saying that:
“The increasingly erratic U.S. president is yelling at an irresponsible central bank to act even more irresponsibly with its monetary policy while running a $1 trillion deficit for the second year in a row.”
Kling alleged that in an uncertain market like this, self-governing, decentralized digital money is exactly what the people need.
Long-time Bitcoin users claim that Bitcoin is an asset independent of central control, with a deflationary supply issuance schedule, and except for the Internet- exists without any traditional system. Even with the allegations of Bitcoin benefiting the wealthy before the underprivileged, Kling believes that ‘the governments and central banks are proving the profound need’ for this digital asset rather than discrediting it.
So to sum it up, it can be said that in the case of Government taking on heavy debt and defaults, it will be Bitcoin that will benefit.
The interest expenses of the U.S. are on its way to exceed the tax receipts themselves by 2022 which in simple words, mean that- more will be paid in interest by America than the tax it will receive, thereby, creating a negative. Thus, the government will be stuck in a loop of printing to pay off the debt. So, in conclusion, Bitcoin is bound to win.