Early stage crypto venture firm Electric Capital claims that recent monetary and fiscal stimulus has hastened bitcoin’s adoption.
In an investor update, the firm argued governments around the world are hastening adoption for cryptocurrency with their unprecedented monetary and fiscal stimulus initiatives.
The firm explained that bitcoin is emerging as a potential store of value versus the U.S. dollar. While some detractors say bitcoin’s short term correlation to U.S. equities has undercut its potential as a store of value asset, Electric Capital called this a “straw-man argument.”
The report reads,
As we regularly state: Bitcoin is not a store of value today relative to USD. It is a potential store of value, as it has many (though not yet all) of the characteristics of an excellent store of value.
The report continued, highlighting bitcoin’s value as a hedge against inflation, fiat devaluation and government seizure. The firm also pointed to bitcoin’s proven track record as a store of value relative to distressed emerging market currencies, emphasizing its popularity in the hyperinflation zones of Latin America and Africa.
The investor update claimed to be optimistic about bitcoin’s long-term potential as a store of value and argued recent market developments have increased the likelihood of bitcoin’s broader adoption.
According to the report, government monetary and fiscal stimulus policies are trending towards a long term "collapse in trust" in existing financial markets and fiat currencies. Simultaneously, Electric Capital reports a long term trend increase in trust in cryptographic systems, on which a new store of value can be developed.
The report reads,
Trust in governments is at all time lows, a global recession looms, unemployment will hit historic highs, government debt-to-GDP is at all time highs, dollar denominated debt payments in emerging markets loom, and many are worried about the scale of government stimulus.
The investor update concluded by saying long term data suggests an increase in global concern over an unsustainable economic path, which may drive people and institutions to consider cryptocurrencies as an alternative.
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