Next, the IMF argues that, “crypto assets are unlikely to catch on in countries with stable inflation.” Inflation means that my money is losing value. It’s losing purchasing power. I wouldn’t call that stable, nor do I accept my money losing value at a steady rate of a central bank’s choosing. To me, stability means my wealth doesn’t get inflated away. “Stable Inflation” Versus Accumulation The IMF goes on to say the people would have very little incentive to save, even if a crypto like bitcoin was made legal tender. And they allege that people would much rather hold a global currency like the dollar or the euro.
Source: Buybitcoinworldwide.com But here’s the piece the IMF is missing. If you’re measuring your investments in weeks and months, you’re going to lose every single time. You need to zoom out and look at it over the long run.
Above is the price of bitcoin in yearly candles since 2009. We can see that it has continued to go up and up, with only a couple of down years. This is a very different picture than what the IMF tells you. Even considering bitcoin’s recent downturn, it’s still up about 300 percent in the last 12 months. Taking the longer view is key. The IMF is trying to scare you by looking only at short-term volatility. The IMF begins by warning us that crypto assets are extremely volatile, as if we didn’t know that. The IMF said that bitcoin, “reached a peak of $65,000 in April, but then crashed to less than half that value just two months later.” So yes, it’s volatile.
The dollar has a laughably poor performance compared to other assets. We can see on this chart put together by Michael Saylor of MicroStrategy, the dollar lost 98% of its purchasing power in just five years versus Bitcoin. Source: MicroStrategy Source: FRED
Inflation is an absolute killer, even if you live under a “stable inflation” regime. You can see the U.S. Consumer Price Index rise rapidly after we went off the gold standard in 1971. Inflation was mellow until that point, and then it’s basically gone straight up. That’s your wealth being stolen over decades. They seriously expect you to believe that people living under “stable inflation” would rather hold and save in fiat currencies, which are guaranteed to lose their value, instead of putting your money into bitcoin, which has a long track record of growing over time. Which one would you choose? And what do people living in countries like Argentina, Lebanon and Venezuela feel about seeing hyperinflation and their currencies blow up? Which one would they choose?
The News Highlights
- IMF issues new encryption asset notice
- Check the latest News news updates and information about business, finance and more.
For Latest News Follow us on Google News
- Show all
- Trending News
- Popular By week