“JPMorgan Sees Inflation Driving up the Price of Bitcoin“– Paul Ebeling
The Fed’s failure to get a grip of inflation will help drive the price of Bitcoin North once it bottoms in here throughout the rest if Y 2022.
US prices soared last year by the highest marks in 40yrs, draining the purchasing power of American households.
Inflation is everywhere, and it will be around for longer than anyone would like.
The Big Qs: Why didn’t the Fed see what was coming? Could they seriously not see how supply chain bottlenecks and a shortage of qualified workers would drive up prices and erode people’s and firms’ spending power?
The Big A: It misstepped, making the biggest miscalculation in its history and showing us how the traditional fiat system, of which it is a Key component as it is charged with maintaining price stability, is really out of step with reality.
We believe this will fuel the demand and therefore the price of Bitcoin, Knights and other cryptocurrencies will run North.
With Bitcoin’s fixed supply of 21-M (KNIGHTS at 5-M), and institutional investors increasingly moving off the sidelines and into the crypto market, it is going to continue to outpace gold as a safe haven for capital.
Money flows to where it gets its best treatment, and with treasuries yielding negative in real terms, moving capital into the Fed is a clear liability for investors.
In this current inflationary frame, Bitcoin has outperformed gold which has always been almost universally hailed as the ultimate inflation hedge until now.
Bitcoin is often referred to as “digital gold” because like the precious metal it is a medium of exchange, a unit of account, non-sovereign, decentralized, scarce, and a store of value.
Yet, we believe that cryptocurrency, including Bitcoin is superior to gold as a medium of exchange and/or form of payment.
Unlike gold, cryptos are fixed units of account and easily divisible and transportable. Gold is not easily immediately divisible, and there are potential issues with purity and verification. Whereas Bitcoin is easily traced on blockchain technology and this is going to be a considerable advantage, especially in cross-border transactions. My sainted grandfather Theodore told me as a boy, “Paul, never own anything you cannot carry with you.“
The Fed has lost control on prices and investors are looking for safe havens to protect their purchasing power.
Have a healthy, prosperous weekend, Keep the Faith!