The Great Inflation Escape: Where Bitcoin Fits In the New Monetary Order [Money Reimagined Pt. 3]

The Breakdown

Blockworks

Investing, Business

4.8 • 806 Ratings

🗓️ 16 May 2020

⏱️ 47 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Niall Ferguson has called this moment an “age of experimentation” when it comes to currencies. One of the unique features of this moment is the experiments are not limited to the traditional actors. It is not just nation-states trying to elevate their currencies in the face of the global dominance of the dollar, but non-sovereign monies born of decentralized networks that are plausible contenders in this game of currency thrones. Bitcoin was a byproduct of the last financial crisis. This connection was immortalized in the message embedded in the genesis block: “Jan 03/2009 Chancellor on the brink of a second bailout for banks.” More than a decade on, in our new financial crisis, the size, scale and implications of that bank bailout seem positively quaint in comparison. This episode looks at where bitcoin and other permissionless, non-state cryptocurrencies fit in the battle for the future of money. It starts with a look at the bitcoin narrative in the wake of the market crash. With the most significant stock market correlation of its life, did bitcoin’s digital gold narrative evaporate alongside the S&P 500? From there, we move to an asset that has been massively in demand since the beginning of the crisis: USD stablecoins. We explore whether this is simply an affirmation of the supremacy of the dollar or represents a more disruptive force in the global monetary order. We conclude with a look at the relevance of bitcoin on the other side of the crisis. As the market moves from deflationary to inflationary, there are many who will be looking to hard assets and sound money as a cure. In that context, bitcoin could thrive.

Transcript

Click on a timestamp to play from that location

0:00.0	Welcome back to the breakdown, money reimagined, a special podcast micro series about the battle for the future of money in the post-COVID-19 world.
0:16.0	This episode is sponsored by Aris X, the Stellar Development Foundation, and grayscale digital large-cap fund.
0:26.6	And now, here's your host, NLW.
0:32.6	Welcome back to The Breakdowns Money Reimagined.
0:35.6	This is a series about the battle for the future of
0:39.7	money and how the evolving economic crisis surrounding COVID-19 is transforming that battle.
0:46.0	Before we dive into our episode today about Bitcoin and stable coins and these off-system alternatives, let's quickly refresh where we
0:56.2	were in our story. In episode one, we started with the strange paradox of the almighty US dollar.
1:02.9	On the one hand was the promise of never-ending money from the Fed. From Fed Governor Neil Kashkari
1:08.9	appearing on 60 minutes saying that they had infinite cash to
1:13.1	an ever-expanding portfolio of special-purpose vehicles to backstop markets in increasingly exotic
1:18.4	ways, the last two months have been filled with the inescapable burr of the money printer.
1:24.6	Yet for anyone who thought that this potential debasement of the dollar would slow its demand, they would have been wrong. Around the world printer. Yet for anyone who thought that this potential debasement of the dollar would
1:28.1	slow its demand, they would have been wrong. Around the world, demand for dollars has only gone
1:33.2	up, often at the expense of local currencies. Still, even if it wasn't some hyperinflationary event,
1:39.7	the dollar wrecking ball, as some called it, still has called into question the foundations of the
1:45.5	global monetary system. Episode two then was about the contenders who are seeking to replace the
1:51.0	dollar system, but doing so by working within the larger monetary order. We looked at the
1:56.9	euro, the Libra, and China's digital currency electronic payment system, or DeSep.
2:02.1	TLDR, none are looking particularly strong right now.
2:05.8	The euro is stuck in the mire of ongoing questions of political legitimacy of the European
2:10.1	Union as a whole.
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Blockworks, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Blockworks and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.