Bitcoin Is Your Hedge Against Fiscal Irresponsibility: CIO Travis Kling

Journalist:
October 10, 2019

Federal Reserve Chairman Jerome Powell made an announcement on Tuesday that delighted crypto enthusiasts.

In a speech at the annual meeting of the National Association for Business Economics, Powell said that the Fed will conduct fresh capital injections with the aim of providing sufficient amount of reserves. The chairman emphasized that the central bank’s efforts to purchase securities should not be confused with quantitative easing (QE).

Many crypto supporters were skeptical of the chairman’s statements. They believe that QE4 is underway and QE infinity may be on the horizon.

Ivan on Tech was not buying Powell’s speech. | Source: Twitter

This type of monetary policy can be disastrous for people in the middle class who are trying to budget every penny. The value of every dollar weakens as more money enters the system. Fortunately, Ikigai Fund’s chief investment officer Travis Kling has a solution. It involves storing your wealth in the best performing asset of the year.

Kling: Central Banks and Their Fiscal Irresponsibility Created the Need for an Insurance

In an ideal world, bitcoin may not exist because there would be no need for it. However, the misguided monetary policies of central banks have forced the hands of anonymous coders to build an asset class that has the following characteristics according to Ikigai’s CIO:

  • non-sovereign
  • hard cap supply
  • global
  • immutable
  • decentralized
  • digital store of value

That’s bitcoin in a nutshell.

The latest antics of the Fed proves that bitcoin’s existence is a necessity. In a tweet, the Ikigai executive wrote,

Bitcoin is an insurance policy against monetary & fiscal policy irresponsibility.

He then added,

Welcome to QE4.

Travis Kling stressing how you can protect yourself against central bankers. | Source: Twitter

Mr. Kling is not alone in his view that bitcoin is an insurance policy. Rhythm trader sees the dominant cryptocurrency as your monetary insurance.

Rhythm’s tweet is now more relevant than ever. | Source: Twitter

Even venture capitalist Chamath Palihapitiya agrees with Kling’s sentiments. In a CNBC interview, the billionaire said that bitcoin “is the single best hedge against the traditional financial infrastructure.”

Not All Traders are Convinced that Bitcoin Is a Hedge Against QE

We spoke to several traders in the Crypto Twitter community and asked if bitcoin is also seen by the average person as a hedge against more rounds of capital injections or QE. Some have doubts.

For instance, Crypto Krillin thinks that the dominant cryptocurrency is not yet in a position to be a safe store of value. The trader told CCN,

The average person does not realize how bad excessive QE is. They may only realize it when the next big recession will hit them in 1.5 years.

The analyst added,

In the meantime, bitcoin must keep its store of value promise to be perceived as a valid hedge. A drop to $4,000 to $6,000 at the beginning of a recession would strongly invalidate this store of value narrative for the average person.

Ian McMillan also chimed in. The trader said,

I doubt it. If gold isn’t viewed as a hedge, or at least hasn’t been a hedge since they started the first round of QE, then I doubt bitcoin would be a viable option either.

So far, it seems that only some people see bitcoin as an insurance policy against central bankers printing more money. Perhaps this new round of Fed asset-buying will open more eyes.

This article was edited by Sam Bourgi.

Last modified (UTC): October 10, 2019 17:21

Kiril Nikolaev @kirilnikk123

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has a bachelor's degree with a specialty in finance and lives in Canada. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. He owns Bitcoin, Ethereum, and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading. Follow the author on Twitter @kirilnikk kirilnikk123@gmail.com