New reality. Why Bitcoin and Donald Trump Win
By Andrey Mastykin on ALTCOIN MAGAZINE
Three months ago, when investors suffered from a 1 year collapse in the digital asset market, I wrote that the growth of Bitcoin is very probable. I knew about the imminent reversal, not because I’m a rocket scientist. Even a simple analysis of the market situation and trends in world politics and economics proved this truth.
Today, my forecast is coming true — Bitcoin tends to $6,000, and investors’ optimism about cryptocurrency is growing strongly again. Meanwhile, in the presidential elections in Ukraine, the famous actor and comedian Volodymyr Zelensky won, who became another person from a non-political establishment who managed to lead a large state.
At first glance, unrelated events, but upon closer inspection they may have a lot in common.
Let me explain why the growth of Bitcoin, the success of Donald Trump in the United States, non-system politicians in Italy, Ukraine and many other countries, are two peas in a pod.
In a world of inequality
Although statistics show a stable growth of the global economy and the average standard of living of the inhabitants of the planet, inequality within most countries of the world has been growing since 1980. In the report of the World Economic Forum, this problem is ranked as a strong global risk in 2019. The gap in income growth between a small group of the richest (about 1%) and all the rest is growing.
Moreover, the gap in income growth between extremely rich (0.001%) and all the rest is already measured in hundreds of percent, and in the case of such countries as Russia tens of thousands of percent.
The other essential trend is the rapid decline in the share of public capital while the growth of private capital.
The gap in many other important indicators of inequality is growing dramatically too.
Not surprisingly, the annoyance of the 50% of the poorest is growing. In various democratic countries, this discontent spills out in different type of protests. In this context, the rebellion of “yellow jackets” in France, Brexit and the frequent victories of populists and right-wing politicians are related events. In the world is growing demand for an alternative power.
Cryptocurrency era
More than 10 years ago Satoshi Nakamoto published his legendary article, where he outlined the basic principles of Bitcoin. Cryptocurrency became a kind of response to bulky and vulnerable banks. The crisis of 2008–2009 increased the sense of injustice. Financial conglomerates for the sake of the profits of several shareholders and managers ignored all the rules of risk management. When it came time to pay the bills, they turned out to be bankrupt. They had to be saved at the expense of taxpayers.
The idea of Nakamoto was simple and ingenious — to get rid of the imposed third parties through a decentralized database and a P2P payment system. In the conditions of total loss of trust in global financial institutions, the trustless decentralized system turned out to be a very timely decision.
Today, we can say that Bitcoin has grown beyond the bounds of the payment system, and becoming the “gold for the poor”, that means a reliable and affordable asset for everyone. In order to own Bitcoin, no intermediaries are needed, banks are not needed, no government is needed, and even big money is not needed — even the poorest can afford a small part of “digital gold”.
Thus, Bitcoin is a response to growing inequality, it’s no less manifesting response to inequality than Donald Trump and other non-systemic leaders.
The frequency of large-scale financial crises in the world is about 10 years. Given the tremendous growth of the debt burden and the lack of central banks’ ability to extinguish the fire indefinitely with money, the next crisis may become to be larger and deeper. The experience of previous shocks teaches us that inequality will only grow as a result. The answer to inequality should be a more flexible use of the progressive scale of taxation, improved access to education, medicine and financial resources. With the political will, it will take decades to fix these issues.
Thus, circumstances are favorable for further victories of populists. Triumph of no establishment leaders does not change the situation radically for the better, and often directly worsens it. Bitcoin also does not respond to all global challenges, since its concentration in the wallets of the largest owners is very high. However, there are no other clear answers to inequality in the world without long-term systematic transformation of the whole world order. Everything indicates that the Bitcoin capitalization can reach trillions of dollars in the next few years.
But who knows what a new genius is writing in its Whitepaper right now.
