According to Balaji Srinivasan, a well-known venture investor and previous CTO of Coinbase, the ideology of Bitcoin Maximalism is likely to grow in popularity as both a philosophical and economic worldview.
On Twitter yesterday, the businessman expressed his perspective that trust in the current financial system will gradually wane as rising inflation in US dollars drives younger generations towards Bitcoin.
Unstoppable Inflation
The U.S. Bureau of Labor Statistics reports that American consumer prices increased by 3.5% over the past year, marking the third consecutive year that inflation has surpassed the country’s 2% goal set by the Federal Reserve.
According to Balaji, although the Federal Reserve has significantly increased its policy interest rate to combat inflation, he argues that this approach comes with unwelcome consequences for consumers, including more expensive loan and car repayments.
Balaj expressed that there was no viable solution, “Given the exorbitant rates, the regime’s financial burden from interest payments becomes increasingly unbearable, making it impossible for them to maintain these levels indefinitely.”
According to the Federal Reserve, the amount Americans pay annually in personal interest has increased from $240 billion in 2021 to a current figure of $520 billion.
In the interim, Bank of America’s studies reveal that annual U.S. Treasury interest payments have surged to an astounding $1.1 trillion, and are expected to climb further to $1.6 trillion by Q4 2024 if rates remain constant. Should the Fed decrease rates by 150 basis points prior to that, these payments would nevertheless increase to $1.2 trillion.
The country’s debt load keeps increasing due to its constant issuance of notes, bonds, and bills in Q4 2023, reaching a staggering $7 trillion once again. According to the US debt clock, the nation’s overall debt burden has surpassed $34.6 trillion after Congress raised the debt ceiling last year.
A Bitcoin Maximalist Revolution
Balaji is convinced that the nation’s debt may cause it to produce large amounts of currency – a risky situation since nearly two-thirds (64%) of young adults aged 18 to 29 consider inflation as their primary concern.
He remarked, “Such occurrences have the power to ignite revolutions.” He continued, “It’s a matter of the people versus the government, the network versus the establishment, and above all, the US dollar versus Bitcoin.”
“I am no maximalist, but Bitcoin Maximalism will rise,” he added.
Bitcoin maximalism represents the perspective and approach that prioritizes Bitcoin above all other financial instruments. This encompasses gold, traditional currencies, government bonds, shares in corporations, and alternative digital currencies.
Michael Saylor, who serves as executive chairman for MicroStrategy – currently the biggest corporation with Bitcoins in its possession – publicly identifies as a strong advocate for Bitcoin.
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2024-04-25 02:36