#bitcoinvsdollar #inflation #bitcoinwallet
Bitcoin vs US dollar: All over the world people keep their savings in dollars. Can storing BTC in a Bitcoin Wallet enable people to become their own Banks in order to maintain their wealth as the USD loses its value due to excessive money printing? With the Federal Reserve printing trillions of new US dollars and the US currency devaluing at an accelerating pace, could there be room for Bitcoin to become the new store of value?
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What is Bitcoin? An Alternative to the Dollar. Can a Bitcoin Wallet Enable You to Be Your Own Bank, chapters:
0:00 Introduction: How the US Dollar is seen as a global store of wealth and default store of value worldwide.
0:25 Why people save in USD: The US Dollar has been a global store of value because historically the US Government has been, for the most part, fiscally responsible and inflation has been kept under control.
0:38 Increase in money printing: The Federal Reserve has been increasing the money supply and printing trillions of US Dollars since the 2008 Global Financial Crisis. The money printing is expected to continue in the coming years.
1:04 US Debt Explained: Next, the US has a Debt to GDP ratio of over 130%, meaning that the US has more debt than it can earn in a year. According to research, once a country exceeds a Debt to GDP ratio of more than 130%, it ends up defaulting on that debt. Defaulting on debt can happen in a few ways. The most common is that a country prints more money, in the case of the US – prints more US Dollars, which devalues the value of the US Dollars causing inflation
2:00 Inflation Explained: The Federal Reserve seems to be aiming to pay off the US Debt by printing more money to pay the debt with. This comes at the cost of significantly depreciating the US Dollar causing asset prices to rise (inflation).
2:17 Bitcoin vs US Dollar: Similar to gold, Bitcoin is considered by many as “hard money”. Unlike the US Dollar, the number of Bitcoins can never be increased or printed, making it one of the top scarcest assets in the world.
2:38 Protecting Wealth Against Inflation: If the central banks and governments had a more responsible economic policy, there may not have been a need for Bitcoin. However, the excessive printing of money and consequence of inflation has decreased the purchasing power of not only the US Dollar (which has been historically seen as the Reserve Currency of the world) but also of nearly every other sovereign currency around the world.
3:02 Bitcoin Price Volatility: The main case against Bitcoin replacing the US Dollar as a store of wealth is the volatility of the Bitcoin price. However, it is important to consider that in a long enough time frame, the Bitcoin Price is not as volatile as the short term time frame as most people end up in profits. Also, in the long run as Bitcoin adoption increases, the volatility of Bitcoin price will likely be similar to that of the stock market.
4:17 Transition from the USD to BTC: The transition from the US Dollar being the global store of wealth towards Bitcoin will not happen overnight. However, we are already 11 years in and the Federal Reserve has not indicated that they intend to stop money printing & debasing the US Dollar anytime soon. As the US Dollar inflates, Bitcoin is gaining trust worldwide as a store of wealth.
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