The Cryptoverse has been seeing calls from some industry players to sell cash for cryptocurrency, claiming that cash is about to become worthless, as the fiat money "printer went brrrrr." However, others warn that, while using as a hedge is a good idea, selling all cash is not.
Crypto market crashed and it crashed hard. It's still struggling to recuperate, with BTC trading at USD 5,233 (14:11 UTC). Some people panicked and started selling their crypto. Others are hodling through thick and thin. As the Covid-19 pandemic is causing major damage to the global economy, individual countries are resorting to different measures in their attempt to ease the impact. In the U.S, the Federal Reserve System (Fed) announced that it would start to increase liquidity by injecting a whopping USD 1.5 trillion into the economy. And the number went up later. Besides the controversial Quantitative Easing (QE) program, the U.S. central bank has cut interest rates to the lowest possible band between 0% and 0.25%, while reserve requirements for commercial banks are slashed to 0%. Meanwhile, the European Central Bank said it will provide banks with loans at a rate as low as minus 0.75%, below the -0.5% deposit rate and so essentially a rebate, and increase bond purchases by 120 billion euros this year. The Bank of Japan said it will buy exchange-traded funds at an annual pace of around JPY 12 trillion (USD 111 billion), double the amount it had pledged to buy till now, and will set aside JPY 2 trillion for additional purchases of commercial paper and corporate bonds.
Meanwhile, convinced that this will be the (granted, a very large) drop that will make the cup run over, finally showing to the masses the uselessness of fiat money, some crypto industry players are telling people to sell cash and buy crypto, or start withdrawing cash from their bank accounts.
This is not investment advi...
— Ryan Selkis (@twobitidiot)
Start withdrawing cash from your bank account now. Maximum daily amount every day.
— Francis Pouliot ?? (@francispouliot_)
Similar calls can be heard even from outside the crypto community. Prominent gold bug and Bitcoin skeptic Peter Schiff argued that investors selling their stocks for cash will lose more purchasing power in cash than they would had they remained in stocks. "If you don't convert your cash to gold, spend it on food and other supplies before its worthless!" he said.
We asked other industry insiders to share their opinions on this matter as well, and they don't suggest to go all-in in crypto.
Hyperinflation or stagnation
Lennix Lai, Financial Markets Director of major crypto exchange OKEx, reminds that the general population does not think of cash as worthless, or that we are stepping into hyperinflation. "However, I think people are starting to doubt the effectiveness of quantitative easing," Lai told Cryptonews.com. Actually, at the moment, the risk of economic stagnation is higher than hyperinflation at this moment, he added.
