Paypal co-founder states that rising US inflation is pushing investors towards Crypto
Peter Theil argues that the Federal Reserve’s failure to control inflation will only empower Crypto
The onset of the COVID-19 Pandemic has placed an incredible strain on both the global economy and the supply chains that keep it afloat. Faced with this unprecedented challenge, many of even the most developed states have resorted to a number of public spending initiatives in order to support those most affected by the pandemic. Furlough schemes, public grants, VAT cuts for essentials and many other measures have been used to try to keep the economic engine going. Yet, at the end of the day, someone has to foot the bill for this massive wave of public spending that the recent and global wave of supply chain crises has only further aggravated.
This perfect storm of economic deficiencies has led to many countries to resort to extreme monetization in order to fund these measures. Almost a fifth of the entire supply of US dollars currently in circulation has been printed in 2020. With fears of rapid inflation and the damage that could inflict on both the economy and civil society, some of the leading figures of the financial sector have voiced the argument that this influx will act as the death-knell of fiat and further galvanize support for cryptocurrencies with Peter Thiel being one of the most prominent voices for this paradigm shift.
PayPal co-founder, venture capitalist and veteran of the financial sector, Thiel is no stranger to the thought of disrupting the financial sector. To this end, he has joined the chorus of fintech pioneers arguing that the Federal Reserve’s decision to print vast volumes of capital in order to fund costly public ventures has only brought cryptocurrency to the peak of their influence in the global market.
Referring to Bitcoin’s recent rally to 60,000 USD per unit, Theil has gone on the record at the second National Conservatism Conference that “I’m not sure that one should aggressively buy [at that price]. But surely what it is telling us is that we are having a crisis moment.” Therefore, Bitcoin’s rally has come to represent a growing sense of unease at the instability of the dollar. In terms of culprit, Theil puts the majority of the blame on the federal reserve for its “failure to address inflation” and fully believes that the recent rises in prices are “not transitory.” The belief that inflationary fears are galvanizing support for cryptocurrencies such as Bitcoin is also held by investing strategists at JPMorgan who indicated that it was said concerns rather than the recent launch of a bitcoin ETF that were the main impetus behind the recent rally.
Information sourced from CryptoNews.com.
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