In Turkey, inflation is rampant at times, the Turkish lira depreciated by up to 30 percent against the key currency, the US dollar. Some of the people threatened by inflation are seeking refuge in Bitcoin.
Inflation is a phenomenon that today’s macroeconomics can hardly be imagined without. The ECB issues an inflation target of around two percent per year. This should provide an additional incentive for consumption and investment, especially in economically troubled times. But the side effects can be serious.
Especially when inflation targets are missed or are even deliberately opened up to make debt-financed public finance possible
It is a privilege that Europe still has a relatively moderate inflation rate. You don’t necessarily have to look to Venezuela or Argentina to see what happens when the money printer is on. There is also high inflation in Turkey and therefore in the direct vicinity of the EU. The Turkish lira has been in free fall since the beginning of the year and has already lost around 27 percent of its value in 2020.
The fact that Bitcoin is enjoying popularity in the Mediterranean country is therefore not surprising.
In Turkey, the Philippines or Argentina, they are pouring into the Bitcoin market. The Bitcoin value proposition is just more obvious to people living with a dysfunctional financial system,
Dan Morehead, founder of the crypto fund Pantera Capital, summarizes the Bitcoin promise in episode 279 of the What Bitcoin Did Podcast .
BlackRock economist thinks Bitcoin is a long-term trend
More and more institutional investors are jumping on the Bitcoin bandwagon. The international chief investor of BlackRock, Rick Rieder, also recently announced an interest in BTC. The CIO told CNBC:
Do I think it’s a sustainable trend that could replace gold in large part? Yeah, I do because it’s so much more functional.
Even short oaths of disclosure like this one are food for the Bitcoin cops. After all, BlackRock is the world’s largest wealth manager with $ 7 trillion AUM. While a few years ago hardly a rooster crowed for Bitcoin, more and more well-known representatives from the traditional financial sector are jumping on the crypto bandwagon. Should BlackRock take BTC into the program with the help of an investment product, the most financially strong public would be available to the crypto market from now on.
What do the halvings mean for the course?
The role of the Bitcoin halvings, i.e. the periodic halving of the inflation rate, for the course is controversial. Authors such as PlanB, the originator of the stock-to-flow model , see halving events as the dominant factor in the price recognition process.
Bitcoin enthusiast and author Nic Carter takes a slightly different stance . In an interview with Bloomberg TV, the Bitcoiner sees exogenous factors such as the extremely expansionary monetary policy of the central banks as price drivers.