Hi, I was wondering if any of you has ever thought of this: the cryptocurrency market is cutting the excess liquidity of the USD due to excessive money-printing/QE. In fact, the crypto market might as well empower the dollar because: -it "takes out" the excess dollars (reducing the volume) -people buy cryptos mostly for speculation, so in the end (at a high peak) many will sell their cryptos to buy up dollars (creating huge demand for the dollar/or other fiat money >>> needless to say it pushes the dollar's price up) So, what I think is happening is that the crypto market somehow "compensates" for money-printing. It has a boomerang effect, empowering the USD/EUR etc. It's odd, but I think this does happen to some degree... no, I'm not saying it compensates 100 %, but to some degree it helps reduce the negative effects of QE. Gold and silver don't. They take out the dollar and "freeze value" physically, letting fiat money devalue further, potentially hyperinflate.
Fiat is used to buy gold and silver so I can't see it having any different impact than mass investment in any other asset class and the "excess liquidity" you mention is not destroyed or contained, just transferred.
Yeh, but when someone sells you a bitcoin and they get your dollars the dollars don't disappear, they are are just owned by someone else. To get the dollars out of the system you would need the banks to be selling the crypto and then taking the dollars out of the system, and I don't think that's happening.
Crypto isnt big enough to influence US dollar in a meaningful way other than short term. In context to market cap USD market cap is about $20 Trillion or $20,000 Billion (just listed shares in NYE) BTC market cap $260 Billion Exxon Mobile market Cap $360billion today. Microsoft had a inflation adjusted market cap of $1 trillion in 1999, today it is $650 Billion a loss of $350 Billion Apple is $900 Billion
overseas people demand for dollars goes up. what what kind of dollars will they get when they liquidate ???
Isn't that like saying the Sydney, London and Vancouver property markets also drain excess liquidity by allowing people to pump huge sums of excess money into them?
