In a letter to investors released on July 29, Pantera Capital CEO Dan Morehead noted that the US Federal Reserve (Fed) had printed a shocking amount of money to combat the Coronavirus-induced financial crisis.
“The United States printed more money in June than in the first two centuries after its founding,” Morehead wrote, “adding that the US budget deficit of $864 billion was bigger than the total debt incurred in the last two centuries.
Since March, the US government has ramped up its monetary activity, attempting to resuscitate a struggling economy that has been incapacitated by COVID-19 aftermath measures.
Such efforts have included a $2 trillion stimulus package, which involved issuing cash to US citizens. And more funds will likely be distributed soon before the current stimulus money reaches its end soon.
This has prompted Morgan Creek Digital co-founder Anthony Pompliano to suggest in a recent YouTube Livestream that the dollar inflation over the last several decades necessitates that individuals exit cash into various assets, including Bitcoin.
Are BTC Prices Immune to Hyperinflation?
As a decentralized and borderless digital currency free from government regulation, Bitcoin has emerged as a potential hedge to traditional markets and national fiat currencies. The digital asset holds a 21M coin maximum supply, shielding it from value dilution. For that, this attribute bitcoin prices could be even more significant as the Federal Reserve’s money printer continues cranking up to ridiculous levels.
The Pantera Capital CEO highlighted the resulting inflation from such extreme stimulus policies as the main reason why folks should get out of fiat money and into Bitcoin, which is immune from hyperinflation.
To add to this sentiment, Anthony Pompliano noted in a recent interview that Bitcoin, as a global hedge fund, has solidified over time, expressing a growing assurance in this concept.
Pompliano cited May 2019 as an example of Bitcoin’s price even moving in the opposite direction of the S&P 500 index and gold amid trade wars and other worldwide market instability.
This is referred to as a negative-correlation for Bitcoin, which becomes really important as a kind of global hedge against hyper-inflation or instability and allows investors to diversify their wealth and add a layer of protection to their fiat holdings.
US Stimulus Could Drive Bitcoin Prices Higher
In a July 22 tweet, Gemini exchange CEO, Tyler Winklevoss, suggested that US government spending could lead to surging BTC prices, adding that the aggressive Fed stimulus continues to set the stage for the asset’s next Bull Run.
Bitcoin is currently in the initial stages of an impressive uptrend after it broke through the $10K level earlier this week.