The U.S. government has been printing the dollar in excess for years, but how does this affect cryptocurrencies?
Cryptocurrency is the future. The “is crypto the future” has been a common question for many people. There are many benefits to using cryptocurrency, but most importantly, it is safe from excessive printing of dollars.
In 2020, the US Federal Reserve launched on a major dollar printing spree, prompted by the necessity to provide financial stimulus packages to American taxpayers amid the Covid-19 pandemic’s wave.
In 2020, the United States printed 35% of the dollar circulation.
According to reports, the year’s printing represented 35% of all dollar printing in the US Federal Reserve’s history.
The two main parties’ leaders decided it was essential since the COVID-19 epidemic had caused an unparalleled economic downturn. The currency circulation increased from $15 trillion to over $19 trillion in 2020 alone as a result of this huge dollar printing.
Although the American government was effective in providing stimulus monies to our residents at a difficult period, it is vital to remember that the vast currency printing would always come at a cost.
In principle, when there is too much of a particular currency in circulation, inflation occurs. The situation is similar to that of the United States of America, when a record huge print resulted in a never-before-seen amount of inflation.
Inflationary pressures on the dollar help Bitcoin and Ethereum.
While this seems to be bad news for the US economy, it has also opened the way for digital currencies such as Bitcoin and Ethereum, which are considered as an accessible and effective inflation hedge.
“The federal government may be making the final argument for bitcoin and decentralized money,” according to a study, “with other international governments eager to issue as much inflating currency as possible.”
“With the dollar’s ever-changing wealth index, the uncertainties surrounding cryptocurrencies and precious metals may soon pale in contrast.”
The fear of rising inflation rates has played a significant part in leading organizations like Tesla, Meitu, and others adopting crypto. According to a recent research from us, Bitcoin was deflationary in the past decade while the value of the dollar was increasing.
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