Bitcoin market
As central banks print more money, bitcoin is becoming the ultimate hedge against financial irresponsibility, CIO claims. | Image:

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
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 using bitcoin
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.

Bitcoin as 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.

You May Also Like

Growth Recession Chokes India as GDP Tumbles, and No One Seems to Care

India’s GDP growth fell to a six-year low in Q2, but the country’s government is in denial while the economy reels under a recession.

Dow Storms Back While Stock Market Bulls Bet on a Trump Miracle

The Dow Jones recovered on Wednesday as traders ignored miserable economic data and bulls bet on last-minute trade deal magic from Trump.

Treasury Yields Bounce Back from Biggest Plunge in Four Months After Fake News Breathes New Life Into Dow

Treasury yields rebounded sharply Wednesday, as traders cycled back into stocks and risk assets over U.S.-China trade optimism.

Dow Futures Surge but Wells Fargo Warns 4 Critical Stock Market Risks

Dow Jones Industrial Average (DJIA) futures jumped 111 points on Thursday, extending…

41% Billionaire Investors Wrongly Predicted 2019 Stock Market. Here’s Their 2020 Call

Almost half of the world’s biggest stock market investors predicted a downturn in 2019. Instead, it was the second-best year of the decade

2020 Will Be a Make or Break Year for the Longest Bull Market in U.S. History

The current market boom represents the longest and best-performing bull run in the history of the S&P 500. But, is the end near?