This time, it was not the financial sector that failed. It was an uncontrollable pandemic that required massiv dept. This time, the money printing is less disputable and seams reasonable, but still, I don't want to be the one to pay the bill of the fiat inflation.
The money printing will have effects and will lead to an increase in:
1. Resource Prices
2. Consumer Prices
3. Gold Price
4. Wages
What does this mean for crypto?
Crypto is in direct competition with precious metals when it comes to inflation prevention tools.
Unfortunately for crypto, gold is the inflation prevention tool of choice for financial institutions, while crypto is the inflation prevention tool of the people.
Does this mean crypto will go up during summer?
Many countries have supported their citizens during the pandemic, but this will stop during this summer.
In the US, the $300 weekly unemployment benefit extension will stop on the 6th of September. This will put pressure on the markets, including crypto, as unemployed US-citizens have to touch their savings after that date. Additional, the inflation will reduce the profit margin for many businesses, leading to additional layoffs.
Supply chain issues are the reason inflation hits hard. We all have set some money to the side that hits an undersupply when lockdowns are over. This saved money is also partly in crypto and will be spent.
We know that "just hodl" works on the long run, but for many hodlers paying for rent and food, or going on that long awaited holiday, will be a good reason to decrease their bag of coins.
So it will be a bumpy ride during the summer...
Unless...
Unless institutions and whales choose crypto over gold.
- Gold seams to be the best bet, but it is actually inflationary.
- Gold production increases by 1/4 every 10 years.
- Crypto can do better than that!
*Ethereum will be deflationary soon. - Making it the best bet against inflation.
(EIP 1559 in July and "the Merge" next year).
Tesla, MicroStrategy, Square, Marathon Digital,... - did join crypto already. Who will be next?
Now that we have Crypto, we can use it to limit the effects money printing has on us.
