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In this episode of Bitcoin Magazine’s “Fed Watch” podcast, Christian Keroles and I recorded live on YouTube as part of the magazine’s near-daily live stream. This week, we reviewed the major trends and news items of 2021 and then dive into predictions for 2022 trends.
Bitcoin And Macro Review For 2021
Keep in mind that many things happened in Bitcoin this year, but these were the biggest trends and events from a currency/macroeconomic perspective.
First and foremost, we have El Salvador’s move to add bitcoin as legal tender alongside the U.S. dollar. It was announced at the Bitcoin 2021 conference in Miami and instantly drew applause from bitcoiners as well as criticism from traditional gatekeepers like the International Monetary Fund (IMF) and World Bank. We spent a few minutes discussing different aspects of the El Salvador news and President Bukele himself. If there was a “Bitcoin Man of 2021” it might in all probability be him.
The second most influential occasion of 2021 was the China Bitcoin ban. After years of flip-flopping with partial bans, the Chinese Communist Party (CCP) lastly did it and banned bitcoin companies and companies in May. This led to an exodus of bitcoin miners from China, primarily to different nations in Central Asia and the U.S. The different half of this story due to this fact is the rise of the bitcoin mining business within the U.S. The U.S. has all the time been residence to many bitcoin miners, however now the U.S. is the most important mining nation on the planet; a title it doubtless received’t hand over for many years to return.
No assessment of 2021 can be full with out together with the availability chain points and what most individuals name “inflation.” This was undoubtedly a foremost subject in 2021 in macroeconomics — the financial system peaked on the finish of the primary quarter and the remainder of the yr was dominated by slowing fundamentals and rising costs.
A fast take a look at Google Trends because the Great Financial Crisis (GFC) reveals international curiosity within the time period “inflation” reached its highest since then, and within the U.S. specifically, the concern about inflation was better than the GFC when the Federal Reserve began on this present path of Quantitative Easing (QE).
You might hardly go a day within the second half of the yr in monetary circles with out inflation being the primary subject. However, discover that this was additionally the worst disruption of provide chains within the final 75 years. Much of the world was locked down for months in 2020 and 2021, no surprise costs rose modestly. But what’s shocking is that the worth will increase weren’t extra dramatic. Several months of near 1% inflation induced all this?
Finally, for 2021 we mentioned the traits in stablecoins and altcoins. Last yr, we witnessed a transparent decoupling in each of those areas. For stablecoins, we noticed the Fed break with the European Central Bank (ECB) and different central banks by not demonizing stablecoins and stiff-arming central financial institution digital currencies (CBDCs). This highlights a elementary battle of curiosity arising between central banks around the globe. As for altcoins, they’ve decoupled from the everyday relationship with bitcoin. In earlier eras, altcoins would pump and be dumped for bitcoin, nevertheless, NFTs, that are a lot much less liquid than a currency-type altcoin, should not simply dumped for bitcoin. This traps worth in scams and stops bitcoin from benefiting from the cycles of utmost hypothesis.
Bitcoin And Macro Predictions For 2022
Now, to some enjoyable stuff. If you’re a common listener of “Fed Watch,” many issues received’t shock you. Here are the highlights, however you’ll must hear to listen to all of our predictions.
We suppose probably the most dominant pattern for 2022 will probably be a rising disaster in Europe. The European debt disaster began in a short time after the GFC, and within the present monetary disaster, we anticipate to see a European debt disaster 2.0. That’s an enormous deal as Europe’s relationship with the U.S. and Fed are cracking, and a few inner fractures are beginning to present.
A extra particular political prediction we now have for 2022 is that the media and politicians will begin shifting extra to the middle. This is consistent with the Fourth Turning timeline, the multi-generational cycle that ends with a return to the middle politically and revamping establishments and society. Those nations that aren’t in a position to “reform” (I’m taking a look at you CCP and Brussels), will face excessive ranges of civil unrest or revolution. 2022 is the yr this turns into clear.
The coming yr may also see a minimum of yet another nation adopting bitcoin utilizing the blueprint of El Salvador. We speculate on which nations this might be. I introduced up the Latin American nations of Ecuador and Panama as a result of they each use the USD equally to El Salvador. Keroles introduced up the African nation of Tonga. There are many choices, a few of them already exhibiting curiosity in bitcoin.
This is a visitor publish by Ansel Lindner. Opinions expressed are fully their very own and don’t essentially mirror these of BTC Inc or Bitcoin Magazine.