This stealth form of taxation, first used by nations after World War II, allows authorities to finance deficits cheaply, gradually erode the real value of the debt burden through moderate inflation, and avoid the relatively harmful alternatives of outright default or severe austerity. (Other indebted nations such as the US, UK and European countries may do the same soon enough.)
Such an environment creates a strong incentive to seek assets with limited supply that can retain purchasing power, such as bitcoin and gold. BTC has already proven its mettle: housing prices measured in bitcoin look far cheaper than in dollars.
But there is a short-term risk worth noting. The GPIF has $931 billion in foreign assets, including $232.1 billion in US Treasuries. A small redirection of capital into local assets could create jitters on Wall Street, potentially spawning risk aversion and selling across all corners of the market, including cryptocurrencies.
For now, however, bitcoin is strong, trading above $64,000, with a key momentum indicator signaling a renewed bullish shift in the market trend. There are several important levels between $65,000 and $80,000 that prices need to clear before a full uptrend is confirmed. Pay attention!
Read more: For analysis of today’s activity in altcoins and derivatives, see Crypto Markets Today. For a comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead.”
