Bitcoin has faced a big drop in its price recently, raising concern among investors and market watchers. Over the past 30 days, the cryptocurrency has witnessed a notable decrease of 7% in its value.
While the recent downturn in the Bitcoin value has demotivated some investors, BitMEX co-founder and former CEO, Arthur Hayes, is here to rescue. Bitcoin-lover Hayes recently explained the historical economic cycles and their implications for Bitcoin as a safe-haven asset.
Hayes categorized historical economic cycles into local cycles of inflation and broader global cycles in a blog post on Medium. He stated that the current economic environment is a local cycle, characterized by significant geopolitical shifts and monetary policy adjustments.
In the current cycle, Hayes observes a shift from a unipolar US-dominated world order to a multipolar one, with emerging leaders such as China, Brazil, and Russia. He notes that governments are increasingly resorting to financial repression and extensive money printing to fund deficits. This has a serious negative impact on asset valuation and preservation of wealth.
During such times, Bitcoin is superior to traditional assets, according to the BitMEX co-founder. Notably, Bitcoin’s ledger is maintained through a cryptographic blockchain, allowing for rapid transactions. In contrast, gold’s ledger is maintained by nature, and its physical transfer is relatively slow. Hayes states that this fundamental difference positions Bitcoin as a more attractive safe-haven asset than gold in a local cycle. He states:
“Bitcoin is superior, whereas gold is inferior. That is why Bitcoin stole some of gold’s thunder from 2009 until the present.”
Bitcoin Price Drop
Bitcoin has faced a big drop in its price recently, raising concern among investors and market watchers. Over the past 30 days, the cryptocurrency has witnessed a notable decrease of 7% in its value. As of the latest figures, it is trading at around $62,500. This represents a drop of over 15% from its previous all-time high of $73,750.
Hayes notes this drop in the Bitcoin price. However, he believes that BTC’s long-term potential remains robust, especially in the face of ongoing monetary and fiscal “looseness”.
Hayes states that loose fiscal and monetary policies will continue the further debasement of fiat currencies. “I believe fiscal and monetary conditions are loose and will continue to be loose, and therefore, hodl’ing crypto is the best way to preserve wealth,” he adds.
Arthur Hayes is a renowned supporter of Bitcoin, identifying it as the primary investment. He describes BTC as “money and only money”. He also supports the innovations in Ethereum and identifies Ether as a commodity powering the Ethereum network.
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