In a landscape where the US government’s debt has skyrocketed to a staggering $34.578 trillion, Strike CEO Jack Mallers sheds light on an inevitable economic trajectory that could significantly bolster Bitcoin (BTC). Speaking with Bloomberg Technology’s Ed Ludlow, Mallers offers a profound analysis of fiscal policies and their implications for the future of cryptocurrency.

The CEO of the Lightning Network wallet Strike points to the rapid accumulation of debt by the US government as a critical catalyst that may send Bitcoin soaring to new heights. With the nation facing an unprecedented financial burden, Mallers articulates the limited options available to the government: default, repayment, or the issuance of more currency. The third option, a strategy to devalue debt through monetary expansion, seems the most plausible yet concerning path forward:

Our government is in debt. Traditionally, if I owed you $20, I’d have two options. I’d, one, have to default on that… The other is I could pay it back. Those are classically the two options that anyone in debt has rightNow, the government, because they centrally plan and control our currency, unfortunately, has a third, and that’s they can print more money, devalue the debt that they have and that they owe and allocate more capital to themselves so our government can’t default

The US cannot default on debt. It would collapse the entire planet. We also cannot afford to pay it back… This is just 101 basics [of] how the world works. If we can’t default and we can’t pay it back, what’s the only option that they have to do no matter what they set and tell you at the Fed chair meetings and all of the economists? They have to issue more dollars.

As more dollars enter circulation, Mallers predicts these excess funds will naturally gravitate towards assets with inherently limited supplies—like Bitcoin. Unlike real estate or gold, which are subject to expansion and discovery, Bitcoin’s cap is immutable at 21 million coins. This scarcity principle underpins Bitcoin’s value proposition in an economy flooded with fiat currency.

Further expanding on Bitcoin’s prospects, Mallers delves into the cryptocurrency’s upcoming halving event (expected around April 20) and its impact on the market. The halving, which reduces the reward for mining new bitcoins, is expected to further constrict the new supply of BTC, potentially driving up its price if demand remains consistent.

Mallers also touches on the burgeoning field of crypto payments, highlighting the role of stablecoins and Bitcoin’s unique position as a “neutral value transfer protocol for the world.” Despite the volatility that might deter its use in day-to-day transactions, especially in emerging markets, Mallers is optimistic about Bitcoin’s technology bridging the gap between stable value and decentralized finance.

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