According to Brendan Bernstein, a set of fundamental and macroeconomic factors, are brewing a Bitcoin storm, allowing for the mainstream adoption of the world’s most valuable digital asset. Brendan, a supporter of Bitcoin, not blockchain—the technology powering all cryptocurrencies and dApp, next year’s events such as Bitcoin halving, 2020 US Presidential elections, perpetual Quantitative Easing, Democratic socialism and MMT (Modern monopoly money theory) are some of events that would accelerate adoption of Bitcoin.
And he is right. By design, Bitcoin is unique in that it preserves value and use draws value over the long-term. This is not rocket science. It’s easy to see why. To begin with, finite number of Bitcoins, at 21 million, generated in a transparent manner with guidance from mathematics translate to better oversight as no-one entity can game the system, reversing transactions or confirming blocks.
All miners have a copy of the ledger and with energy securing the system, there is complete transparency. Users know the exact number of coins in circulation and by adjusting the network’s difficulty, the theoretical number of coins churned in a day can be projected.
QE, Opaque Operations and Inflation
That’s in contrast to legacy system where central banks’ operations are shrouded in secrecy where the exact number of sovereign–backed fiat cannot be accounted for with great precision. Add that to proliferation of fake monies and odds are stacked against hard working citizens. But, even with this, stimulus packages in offer the different central banks in a bid to stimulate the economy through spending leads to inflation.
In Quantitative Easing, which Investopedia defines as “an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to increase the money supply and encourage lending and investment”, value is lost and if more banks adopt this strategy, it’s not hard to see that savvy investors would move their stash to an immutable, mathematics controlled settlement layer where the value of the native currency will likely increase over the short-term outperforming traditional assets like Bonds and Securities.
Why Bitcoin Will Likely Surge
Meanwhile, the rise of Democratic Socialism and 2020 US Presidential elections will further create a world of uncertainty. Investors prefer economic stability immune from geopolitical factors or uprisings for example.
Intrinsically, Bitcoin (BTC) and basically all decentralized networks are unaffected from political development and at the time of uncertainty, capital flow from stocks to digital assets and Gold. Gold surged a few hours after Trump was elected. Catalyzing this is the halving the same year when Bitcoin rewards will drop from 12.5 to 6.25 BTC on around 24 May 2020. A drop in BTC rewards mean scarcity and from the law of supply-demand, assuming widespread use—of which there are indications that BTC use is on the rise, price and value will consequently rise