The Wild West Crypto Show Preps for Dollar Inflation

With the Fed pumping close to $3 billion to shore up an economy devastated by the pandemic (http://nnw.fm/aOQfr), individuals and institutions alike are awash in cash, bumping up the national savings rate and raising the specter of inflation. That was one of the main discussion points during this week’s show.

According to hosts Drew Taylor and Brent Bates, the appearance of a “flight to safety” is not surprising. Along with the expected pressure on consumer prices, the developments in today’s market have driven up demand for traditional safe haven assets, such as precious metals, and some novel ones, notably cryptocurrencies, sending their prices and valuations soaring. In April, for example, the market value of the top-10 cryptocurrencies climbed above $178 billion, with Bitcoin accounting for 70% — $128 billion — of that value (http://nnw.fm/KD56h).

Two Prime COO Alexander Blum was a guest on the show. His company has launched an entirely new asset class that combines the best practices of traditional finance and the crypto world. Two Prime’s flagship FF1 token will be offered to the public, with the proceeds of sales being invested in well-diversified public and private sector projects through managed baskets of assets.

Jonathan Keim, communications director of CryptoCurrencyWire (“CCW”), tuned in for his regular weekly news update, which kicked off with the intriguing headline: “Bloomberg: Americans Trade Depreciating Dollars for Bitcoin” (http://nnw.fm/jEPpN). Fearing an inflation-driven devaluation of the dollar, investors are shunning savings accounts, money market funds, and treasuries, and placing their cash in speculative assets such as stocks, gold and Bitcoin. This has pushed prices to record levels. In the last several months, the stock market has regained the lofty levels it had reached in late February while Bitcoin has appreciated by 55% and gold has climbed 29% to a level not seen since 2011.

Keim’s second headline looked at how one company is responding to inflation expectations: “Nasdaq-Listed MicroStrategy, Wary of Looming Dollar Inflation, Turns to Bitcoin and Gold” (http://nnw.fm/1er6b). MicroStrategy, a Nasdaq-listed provider of business intelligence, mobile software and cloud-based services, plans to invest $250 million of its cash reserves in Bitcoin, gold and other alternative assets over the next 12 months as a hedge against U.S. dollar inflation. The company’s CEO says it makes sense to “shift our treasury assets into some investments that can’t be inflated away.”

Finally, the news that a basic “banking product” will soon be available should bring cheer to the crypto community; this headline read “Genesis Partners with Luno to Create Alternative Savings Products, Extending Institutional Crypto Interest Rates to 4 Million Global Consumers” (http://nnw.fm/pdn8V). Genesis, which provides digital-currency, prime-brokerage services, is joining forces with cryptocurrency exchange Luno to offer customers of the latter opportunities to earn interest on their crypto holdings. Earning interest on deposits is a defining characteristic of the established banking system. With this development, crypto has moved closer to convention.

To view the most recent episode of the Wild West Crypto Show, now on TV in 45 cities across the nation, including its ongoing segment from CryptoCurrencyWire featuring the latest news from around the world, visit http://nnw.fm/m6k2F

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