On Tuesday, the CEO of Coinbase, Brian Armstrong, argued that if Bitcoin is widely adopted, its working principle will be similar to a return to the gold standard. By prepositioning cash, bonds, and other currencies, he thinks it will give the nation’s economy the support needed to withstand any debt increase. This was according to a post he recently shared on his X account.
Armstrong’s idea began as part of a conversation about the U.S. debt situation, which is growing at an unbearable rate. He argued that the key to Bitcoin is its unique traits, and he saw the chance that Bitcoin could resolve this problem.
Different from the unlimited issuing of dollars done by the Federal Reserve (the United States central bank), only 21 million coins of Bitcoin can be generated. Furthermore, mechanisms such as the halving that happens every four years cause the number of coins that miners get as rewards to remain competitive in the industry. This crystallized mechanism makes bitcoin deflationary, which in turn gives it the chance to predictably increase its value.
This characteristic provides Bitcoin with the reputation of a store of value that is comparable to precious metals such as gold. Moreover, the fact that Bitcoin is digital is its specific advantage in contrast with the “tangible” gold since the process of money transfer between users occurs much faster and more fluidly. Thus, the fact that BTC has been built upon the same principles as any other digital representation of cash makes it another choice for a currency with base value rather than growing, as the US dollar with higher and higher supply.
Armstrong believes that the massive adoption of Bitcoin may look like a new return to the gold standard. In this case, Bitcoin’s limited supply can become a measure for restrictive government expenditure, which could be used as a sure way to avoid currency inflation, and hence, to strengthen the U.S. dollar against price spikes.
Coinbase is one of the major players in the crypto industry as it enables people to trade in BTC and other cryptocurrencies. Their service, which is quite easy to use, helps buyers and sellers in attracting cryptocurrencies. In general, this is the way to widespread acceptance.
The exchange has just announced the intention of raising $1 billion utilizing a convertible debt issuance, an identical trajectory that has been successfully used by MicroStrategy.
Also read: Crypto Funds at Asset Giants Smash 2021’s Record Inflows
