Simply Bitcoin: Bitcoin and the Changing World Order
Risk-on assets like growth stocks and cryptocurrencies have been the hardest hit in this market selloff. Yet these assets could play a role investing going forward.
That’s based on a few factors, the most critical of which is the adoption of a new technology. For crypto, Bitcoin still has the lead, in terms of network size, the number of nodes, and the number of technologies being built off of Bitcoin.
With markets potentially in a cycle that could see some sort of wealth destruction, Bitcoin could snap back to new highs sooner than many think.
The cryptocurrency is down 70 percent from its recent highs. But over the past 5 years, it’s up nearly 700 percent.
That perspective indicates that Bitcoin continues to serve as a store of value. More importantly, it’s one that’s outside the control of any government. Investors face rising interest rates. And a sense that governments are losing control of their ability to control monetary policies. Consequently, investors need a hedge.
In addition to this economic cycle, any pullback could also lead to a changing world order. Typically, nations that have led the world have started out strongly, on solid fundamentals. Then they have tried to extend their economic progress using tools like monetary policy in lieu of real growth.
With fiat currencies being the world norm for about 50 years now, the global monetary system is loaded with debt. It’s poorly prepared to handle significantly higher interest rates. That could be a boon for other assets in this market.
