The Bitcoin (BTC) FUD train has continued to chug along. This time, the European Central Bank’s former president Jean-Claude Trichet has cast doubt on cryptocurrencies, bashing assets that many say have the potential to usurp the system he used to work for.
Not a Real Currency
Speaking at Caixin’s 10th annual conference in Beijing, Trichet asserted that he is “strongly against Bitcoin,” adding that society is a “little complacent” in believing that cryptocurrencies have substance. “The [crypto]currency itself is not real, with the characteristics that a currency must have,” he asserted, echoing the sentiment pushed by billionaire investor Warren Buffet and others.
He added that buying cryptocurrencies is often a more of “pure speculation,” before quipping that the speculative nature of this market “is not healthy.”
Need for Bitcoin Growing
While this incumbent of traditional finance is bashing Bitcoin as a non-currency, the underlying need for the cryptocurrency is seemingly bigger than ever.
This week, Ray Dalio, the founder of Bridgewater Associates, released his latest views on the macro environment on LinkedIn. While Dalio has undoubtedly benefited from the growth of the traditional economy, he sees holes in it.
These include but aren’t limited to extremely low, and even negative interest rates for the creditworthy, large government deficits that he believes are almost certain to “increase substantially,” the impending collapse of “sound finance” in “reserve currency countries and their currencies,” massive liabilities in pensions, and a growing wealth gap. Dalio remarked that all these factors have led him to believe that the “system of making capitalism work well for most people is broken.”
My below piece “The World Has Gone Mad and the System is Broken” explains some of the crazy things that are happening, why they are happening and why I believe that they are unsustainable. I’d be interested in knowing what you think about them. https://t.co/daUdsw0XLy
So, what’s the solution? Bitcoin, according to some industry executives anyway.
The libertarian chief executive of ShapeShift, Erik Voorhees, wrote that Dalio’s comments only show the need for something like Bitcoin. Voorhees cited one facet of the post, in which Dalio stated that the collapse of the current system is likely to see governments try and “trap” the “rich capitalists,” who may attempt to move their capital and operations to places “in which the wealth gaps and conflicts [resulting from those gaps] are less severe.”
This, of course, would validate the need for an uncensorable, unseizable, decentralized, and non-sovereign money like Bitcoin.
Also, the Bridgewater founder’s assertion that “sound finance” will be thrown out the window, especially in countries like the U.S. and Japan, implies impending rampant inflation, which should aid the disinflationary Bitcoin.