Fiat Funded Bread and Circuses. Bitcoin Tech Talk Issue #221
Happy New Year! 2020 couldn’t be over fast enough and of course, Bitcoin is going parabolic. While the crazy price action is generating plenty of press, the real question on my mind is, how much of this is the depreciation of fiat currency versus the new demand for Bitcoin?
Surely, the two are related, but the expansion of fiat money the past year has been extraordinary. How much of the price increase is due to that versus, say, the halving? If, say, the s2f model is roughly correct, the idea would be that the USD monetary expansion would contribute to the overshoot of the model. The expansion, of course, is a political reality of a economically devastated world.