The macroeconomic landscape for bitcoin (BTC) could become more difficult to navigate as the US Federal Reserve continues to raise interest rates. However, bitcoin is the only way to transition to a new monetary standard, panelists at a discussion on the current macro backdrop at Bitcoin 2022 have argued.
Opening up the discussion, Dr. Jeff Ross, founder and CEO of Vailshire Capital Management, urged the audience to get “mentally ready for what could happen” to the bitcoin price in the short-term.
Bitcoin is still strongly correlated to the stock market, he said, warning that planned rate hikes by the Federal Reserve (Fed) could translate into lower stock prices going forward.
However, Ross still said that bitcoin remains a viable way to store value and save money over the long-term, given how he expects fiat money to decline in value.
People will flock to bitcoin because they need to preserve their purchasing power, he said.
Ross further added that the value of bitcoin over time “approaches infinity,” and said that MicroStrategy CEO Michael Saylor is right when he said that ‘it’s going up forever, Laura.’
A technological and decentralized revolution
Meanwhile, Mark Moss, a popular YouTuber and bitcoin advocate, said that “we’re witnessing a technological revolution and a decentralized revolution,” adding that this comes at a time when there’s a lack of trust in society.
Nations don’t trust each other and people don’t trust their nations, Moss said, noting that “a decentralized ledger” is the best way to fix this.
Similarly, other panelists, including Jeff Booth, a technology entrepreneur and author of the popular book The Price of Tomorrow, said technology is a driver for change today, and that it has “always been a driver.”
This is something that Ray Dalio misses when he speaks about the “end of the long-term debt cycle,” both Moss and Booth argued.
Ray Dalio is a famous investor and co-chief investment officer at the world’s largest hedge fund, Bridgewater Associates, who has become known for his extensive work on debt cycles.
Fiat money takes from the poor, gives to the rich
According to Jeff Booth, the current fiat money system means that wealth is continuously “transferred from the poor and middle class and to the rich.” Technology is deflationary, but the Fed is trying to counter that by printing more money, he argued.
Booth further opined that this inflates asset prices, which benefits owners of the assets, while people who don’t own assets pay for it in the form of higher prices on everything.
“This is not how the free market is working. The free market is deflationary,” Booth said.
On the same note, he also said that ESG (environmental, social, and governance) issues are “unsolvable” without bitcoin because fiat money must continue to be printed in order to “pretend we live in a growth cycle forever.”
“I asked this question to Bill Gates, I asked this question to Al Gore and on Twitter […] and there’s not one plausible answer,” Booth claimed, adding that this tells us that “there is no answer from the existing system.”
Inflation causing ‘incredible shock’
Lastly, Preston Pysh, a popular BTC advocate and host of The Investor’s Podcast, warned that the transition from the prior era of low inflation to the current era with high levels of inflation is going to be difficult.
When you go from an environment of low inflation, “you can see why we’re in for an incredible shock for the global economy” with the inflation levels we have now, Pysh said, before adding a final piece of advice:
“Buy bitcoin and fall asleep for five years.”