Why the Bitcoin Bull Run of 2020 Is Different from 2017

The U.S. Dollar Collapse Is The Driving Force Behind The Meteoric Rise Of Bitcoin

Unless you’re living under a rock, you’d probably know that the central banks have been releasing stimulus packages to help those suffering from the pandemic. After printing trillions of dollars back in April 2020, the Fed has begun rolling out the second stimulus package to boost economic recovery via quantitive easing.

In layman's terms, quantitive easing is a policy adopted by central banks to buys long-term securities to pump more money into the economy thereby increasing money circulation and encouraging people to borrow more.

Effectively, QE is done to prevent deflation and stimulate GDP growth through the supply of a currency. But if the economy recovers slowly this monetary policy can cause bigger repercussions — hyperinflation in the doomsday scenario.

Essentially, for every new dollar printed, the value of the current dollar in the market weakens and people end up losing their purchasing power which in turn causes a rise in inflation. No surprise, the U.S. dollar is collapsing at an unprecedented rate as people look to increase its value through the stock market and other vehicles.

When there’s so much uncertainty about the future of the U.S dollar, people typically flock towards safe-haven assets to protect themselves against inflation. Gold had been the de-facto store of value for decades. But with changing times, the world is slowly understanding the advantage of Bitcoin begins right at its inherent nature — which is de-regulatory.

Also, unlike Gold which could possibly be mined from Mars in the future, Bitcoin has a limited supply only. With only 21 million Bitcoins available and the last one to be mined by 2140, people have realized that it's a deflationary asset at its core. The price of Bitcoin won’t increase irrationally once its supply ends.

As this article succinctly points out, the central banks and government can steal your fiat currency by printing more. Therefore, investing in Bitcoin might just be the best way to counter the weakening dollar — which has led to the current buying spree.

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