Cryptocurrency Price Increases Mirroring Those of Gold & SilverStaff Writer
Bitcoin and cryptocurrencies grew out of the ashes of the Great Recession, as Satoshi Nakamoto created Bitcoin to overcome the problems inherent with fiat currencies. After a $700 billion bank bailout, an $831 billion stimulus package, and trillions of dollars of quantitative easing, many people realized that the orgy of government spending was not only not good for the dollar, it wasn’t good for ordinary investors and consumers.
Inflation has in recent years been accepted as a reality of life, as certain as death and taxes. No one remembers that prices haven’t always risen. In fact, the history of prices from the 1700s until the elimination of gold standards with World War I was one of steadily falling prices. Instead of money losing purchasing power each year, it gained purchasing power each year. That’s what Satoshi sought to achieve with Bitcoin, a currency that gained value and purchasing power each year rather than losing value like the US dollar.
Thus far Satoshi has been successful, as both Bitcoin and the other cryptocurrencies that swept in to compete have grown tremendously in value. Bitcoin is currently at over $11,000, Ether is close to $350, and Litecoin is at $58. More importantly, each of these coins has shown significant growth over the past two weeks, mirroring the moves seen in gold and silver.
That seems to confirm that cryptocurrencies are serving an important role as hedges and stores of value, just like gold and silver. While Satoshi may have intended for cryptocurrencies to be used in everyday financial transactions, they have morphed into something far greater, now being used just like any other money, in everything from cryptocurrency IRAs to Bitcoin futures and options.
We always knew that one of the tests of the long-term stability of cryptocurrencies would be whether they performed in a crisis as well as gold and silver did. Thus far, cryptocurrencies seem to be passing that test with flying colors.