At Bitcoin Amsterdam, a panel argues that the world's biggest cryptocurrency serves as a crucial insurance policy against rampant inflation.
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The Federal Reserve's push to tighten interest rates will create a "death spiral" and a credit collapse, a panel at Bitcoin Amsterdam has warned.
Jeff Booth — an entrepreneur who wrote The Price of Tomorrow — told the crowds that inflation is manmade, and prices should actually fall as mankind invents ways of doing things better.
Major central banks, including those in the UK and U.S., have long set an annual target of 2% for inflation.
But according to Booth, this results in a "2% theft in your money" in exchange for a productive economy.
He warned that this can quickly cause inflation to turn to 3%, 5%, 8% or even 15% as the credit-based system expands — hurting consumers in their wallets. Booth added:
"That system we live in — the one you measure your house prices by, you elect your officials in, everything you do reinforces that system."
Booth went on to argue that Bitcoin can serve as both an inflation and a deflation hedge — and that the world's biggest cryptocurrency is repricing the entire fiat system over time.
He was speaking on a panel that debated whether the narrative that Bitcoin is an inflation hedge has failed.
BTC has often been presented as one because of how it has a fixed supply of 21 million coins — a hard upper limit that can never be altered.
Central banks worldwide have aggressively increased their monetary supplies over recent years — especially during the coronavirus pandemic — eroding the value of the currency that's already in circulation.
But even as annual inflation reaches double digits in some major economies, this hasn't been reflected by an uptick in Bitcoin's price.
Fellow panelist Greg Foss, executive director of strategic initiatives at Validus Power Corp, told the crowd that total global debt now stands at $400 trillion — encompassing everything from the money owed by governments to the outstanding balance of mortgages.
But by contrast, he said that the global economy is only worth $100 trillion per year, meaning it's unable to keep up with ever-increasing levels of debt.
"Do we think that the global economy can grow at 12% in order to keep pace with the growth in debt? I think the rational answer is no."
Foss went on to describe this as "grade 11 math," and argued that Bitcoin is insurance against credit inflation — but not necessarily the uptick seen in the Consumer Price Index.
"That is pure mathematics because we have reached a point in global debt where it is growing organically faster than your economy or tax base can possibly keep up. Don't overthink it. We have reached the point of no return, you need your appropriate insurance."
