Inflation protection is in demand: crypto expert: "Bitcoin is the new gold"

Saturday 19th December 2020

Inflation protection is needed
Crypto expert: "Bitcoin is the new gold"

The oldest and most important digital currency currently only knows one direction: up. Bitcoin is a "corona winner," says Markus Miller ntv.de. For him, the debt orgies in the pandemic are "the beginning of a new crypto-economy". Should investors still get in despite record highs?

ntv.de: More than 23,000 dollars are now due for a Bitcoin on the Bitstamp platform. That is a price increase at supersonic speed. Where does the sudden surge come from?

Markus Miller: There are two main reasons for the massive upswing: First, the regulation of crypto currencies like Bitcoin is becoming more and more liberal in many countries. Bitcoin is now legal in 130 countries, including all major economies. There are only restrictions in China and India. This increases legal certainty and this effect means that large institutional investors such as asset managers, fund companies, banks, family offices, insurance companies and pension funds can also invest in the new asset class. Second, the acceptance of cryptocurrencies in the financial industry has increased significantly, as you can easily see. The market capitalization of the more than 8000 digital currencies listed on Coinmarketcap.com is currently around 650 billion US dollars. With a market share of around 65 percent, Bitcoin makes up the lion's share. In my opinion, this is mainly due to the fact that we are currently seeing strong cash inflows from large institutional investors such as US asset managers Grayscale or Fidelity Digital Investments.

Is Bitcoin a Corona Winner?

Yes, Bitcoin is a corona winner in several ways. Due to the debt orgies in the course of the Corona aid programs, trust in our existing monetary system is suffering. In the 1980s there was "Reaganomics", the expansive economic policy under the then US President Ronald Reagan. In Great Britain there was "Thatcherism" and in Japan "Abenomics". In the coming years, a new political driver will ensure changes in the global economy. This will not be an individual politician or state, but will have to do with the developments and measures in the Corona crisis. Governments, companies and societies around the world are being driven to action by the pandemic. Logically, this economic era should go down in history as "Coronanomics". "Coronanomics" will lead to another explosion in debt. I am convinced that we are at the beginning of the age of a new crypto-economy, which I call kryptonomics.

Critics like to refer to Bitcoin as mania. Because you can't force something like that into a model, predictions are not possible, they say. What do you think?

There is a 100 percent probability that there is no predictions for anything in our lives. The fact that Bitcoin cannot be forced into any conventional model – due to its decentralized design that is independent of the influence of third parties or a central authority – is precisely the greatest advantage. A mania is an addiction or a morbid passion. Bitcoin has nothing in common with this, on the contrary. The Bitcoin is based on mathematics and rationality. Our existing financial and monetary system is irrational. This must be described as sick, because it has to be kept alive by ever new debts and amounts of money, at the expense of the purchasing power stability of the currencies in the future.

Jump on the speeding train now might be dangerous. What do you advise investors?

I advise exactly what I have been advising for years. Basically, I expect significantly higher Bitcoin rates, but – as in the past – there will be no one-way street on the way there, but massive fluctuations, price distortions and price drops will also be part of Bitcoin in the near future, like the amen in church . Yes, I still advise getting started, but in tranches. That said, the most important thing is to open a real crypto account, make a first purchase and then make purchases at regular intervals. This means that you are invested if the trend continues upwards and diversified in an alternative financial system in the event that our conventional monetary and financial system is subject to upheavals or even a collapse. If there is a setback in Bitcoin, additional purchases can be made. Therefore, disciplined savings plan strategies or investment plan strategies on cryptocurrencies make a lot of sense.

In the eyes of the critics, a digital currency is nothing more than a bet on the collapse of the world financial system. In their view, the governments of the world will by no means allow this. Is an end for digital currencies in the sense of an absolute control or even a ban conceivable?

A supposedly safe savings account or an AAA government bond is also a bet, namely a bet on the stability of our banking and currency system. I rate this bet as much more dangerous than a dosed Bitcoin investment. As an investor, I am not betting on a system crash as a result; I am taking out insurance against it. If I take out accident insurance, I don't bet on an accident or hope to have an accident, but protect myself from it. A single country that bans Bitcoin & Co. loses its attractiveness as a democracy and technology location and thus the basis for investments from home and abroad. Absolute control would only be possible if all countries in the world uniformly prohibit Bitcoin. And even then, it would be technologically difficult to implement the ban measures in practice due to the digital properties and possibilities of Bitcoin. That is unlikely with a probability bordering on certainty.

Crypto fans often refer to Bitcoins as the new gold. Would you agree with that?

Yes! Bitcoin and gold have several things in common. Due to its worldwide acceptance and market penetration and its high market share among crypto currencies, Bitcoin is the crypto world leading currency. Bitcoin is increasingly becoming an alternative world reserve currency, comparable to gold. Gold is limited by nature due to its limited occurrence in the earth's crust. Gold cannot be artificially produced by human hands – like paper or bank money. The same applies to Bitcoin, which is mathematically limited to a maximum of 21 million pieces based on its program code. These volume limits for Bitcoin and Gold are important anti-inflation effects.

With Markus Miller said Diana Dittmer