Are you as confused as I am about @balajis' million-dollar bet on hyperinflation & Bitcoin mooning? π€
He said hyperinflation is coming in the next 90 days & Bitcoin will hit $1M! Some say he's insane, but hey, that's why he's a millionaire!
Let's break it down π§΅
He said hyperinflation is coming in the next 90 days & Bitcoin will hit $1M! Some say he's insane, but hey, that's why he's a millionaire!
Let's break it down π§΅
2/ I attended a Twitter Space with @balajis & @gladstein and let me tell you, I've got some tea β to spill about this situation.
3/ Thanks to the pandemic and US Government's stimulus, people & businesses had more cash than before. π°
So instead of borrowing more, businesses and consumers were paying off old loans and holding onto their cash. And banks were left with...not much to do. π¬
So instead of borrowing more, businesses and consumers were paying off old loans and holding onto their cash. And banks were left with...not much to do. π¬
4/ So Banks invested heavily in government bonds, which is not exactly very lucrative.
Rates on Treasury bonds were still near historically low levels. But times were also uncertain & Banks were willing to accept a lower rate of return.
Rates on Treasury bonds were still near historically low levels. But times were also uncertain & Banks were willing to accept a lower rate of return.
5/ But here's the kicker: The Fed then went and devalued those bonds drastically, leaving banks in a bad spot. πΈ
6/ How did they do it? By increasing the interest rates, which is what banks use to lend money to each other.
7/ But why did the Fed have to increase interest rates so much?
To fight inflation, which has hit a 40-year high!
To fight inflation, which has hit a 40-year high!
8/ This has left hundreds of banks insolvent, which means they don't have the money to pay back depositors. Yikes. π±
And a few of them, namely, Silicon Valley Bank (SVB) & Signature Bank, failed!
And a few of them, namely, Silicon Valley Bank (SVB) & Signature Bank, failed!
9/ Now the Fed is trying to help them with a βdiscount windowβ for emergency loans, that allows banks to trade the devalued bonds for their original value in cash.
Are Banks utilizing this? Hell Yeah!
Are Banks utilizing this? Hell Yeah!
10/ But is this gonna stop the Fed from raising interest rates further?
No, Cuz inflation is still at an alarming rate! So they might raise rates a bit more.
And this whole vicious cycle is going to lead to hyperinflation, eroding the value of the US Dollar.
No, Cuz inflation is still at an alarming rate! So they might raise rates a bit more.
And this whole vicious cycle is going to lead to hyperinflation, eroding the value of the US Dollar.
11/ Now what should the consumers do?
@balajis says to Invest your money in Bitcoin.
That way your money won't lose its value and won't get stuck in an insolvent bank.
@balajis says to Invest your money in Bitcoin.
That way your money won't lose its value and won't get stuck in an insolvent bank.
12/ Also, Bitcoin mooning (to ATH of ~$1M) would be the fire alarm for the world to wake up to and acknowledge the dollar's loss in value as a reserve currency of the world.
He calls this the #Bitsignal
He calls this the #Bitsignal
13/ And #Bitcoin will emerge as the new reserve currency of the world!
14/ It may sound unrealistic, but maybe Bitcoin wasn't ever gonna become the Reserve currency organically over time as expected by the majority of us.
Maybe this economic crisis could be the one that's gonna make it (or force it) to emerge as the "New World Reserve Currency".
Maybe this economic crisis could be the one that's gonna make it (or force it) to emerge as the "New World Reserve Currency".
15/ What do you think of this?
Let me know in the replies.
Let me know in the replies.
16/ I hope you learned something useful from this.
If you liked this thread, please show some love and retweet it so others also can benefit from itπ
And follow me for more such content. π
If you liked this thread, please show some love and retweet it so others also can benefit from itπ
https://twitter.com/0xDeekay/status/1637688102876745728?s=20
And follow me for more such content. π
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