The news cycle right now is talking about bailouts and the FED and how the U.S. economy is gearing up for more record-setting prints.
The only way out of this crisis is for the FED to go back to quantitative easing. The hardcore whipsaw of QE to QT (Quantitative Tightening) has caused banks to lose billions upon billions of dollars in assets under management.
The problem? These assets under management (AUM) are customer deposits. The banks deployed this money into various bonds, thinking that the FED policies weren't going to whipsaw in the manner that they did. Banks didn't predict an economic future like this, which is quite ironic because people in Crypto have been yelling this from the mountain tops like there was no tomorrow. We've been doing that since the inception of Bitcoin.
$1M Bitcoin in the Next 90 Days?
Balaji is a famous figurehead in the crypto space. The former CTO of Coinbase, he has been a voice of incredible reason and great predictions on Twitter.
Many speculate that he holds a ridiculous amount of Bitcoin and his net worth is over $1B. We don't have any concrete figures on that, but people are quite confident based on past tweets and info about Balaji.
He recently posted a Tweet stating that he was betting $1M worth of Bitcoin that BTC would be worth $1M in the next 90 days.
His reasoning? He thinks we're on the verge of a massive economic meltdown. Banks are going under and we're about to see massive hyperinflation in the United States.
That's how we get to $1M... Through hyperinflation of the USD. It also means that the cost of goods and prices of other assets will rise accordingly.
Do I believe this is possible?
Not really. I think the U.S. is a very large ship and they have a lot of options to get themselves out of trouble. The thing is, they're in big trouble. Someone's gotta get stuck holding the bag. In history, this has always been the American Taxpayer.
Things are different though. We have social media and the general population is a lot more financially savvy than they used to be - although that isn't saying a whole lot.
What's Going to Happen?
I've asked people I know IRL to tell me what they think is happening with banks and their overall opinion. People are aware of the news cycle but it's shocking how little people understand about the banking system - the place where they literally hold all of their wealth and future financial wellbeing.
I also know a few bankers IRL. People who work at banks in various positions.
These people have always told me that they don't trust Bitcoin. They think it's digital jargon and will eventually go to 0 because there are no trusted intermedaries.
They are biting their tongues when it comes to this banking crisis.
Sure, BTC has no trusted intermediaries, but do banks have trusted intermediaries either? I think the trusted part of that equation is missing. Banks are simple intermediaries that do whatever they want. Regulators are asleep at the wheel and aren't even properly watching and regulating these banks to make sure that they're not doing anything volatile and stupid with depositor capital.
I find the whole situation to be extremely ironic.
What do I think is going to happen next?
While I love to ask other peoples' opinions, I believe we're going to see a bailout across the board. I think a lot of small banks are going to get caught with their pants down and a lot of other banks are going to consolidate (big banks eat small banks).
Hive Fixes This
I believe Hive has a unique opportunity, just like Bitcoin does.
Bitcoin offers us all digital gold. A unique method of accounting. A storehold of value. Something that can't be printed out of thin air and devalued like all other fiat currencies can be.
In an age where we have trust issues with the government, banks and central banks, we need a currency that anyone can use and nobody can control. That's vital.
Hive has a unique value proposition too - imagine that you are unbanked in some corner of the world. You probably would have a really hard time even getting your hands on Bitcoin.
The crazy thing is that Hive offers you the ability to slowly grind and build up your own little bank on the internet. Imagine if you started creating content, using apps like Splinterlands or LeoFinance... Imagine if you found a way to build up some capital in savings and start earning 20% on HBD deposits and 12% on your HIVE POWER.
This is like your own little bank that you've created. Separate from your local power structures and entirely in your own control. It's something that nobody can take away from you and it's something that sweat equity alone can build.
Now, for some of us we can even take it to that next step. If we are banked, then we can invest and accelerate our actions with dollars to make it even more effective.
Bitcoin doesn't have this quality. Yes, it has the quality of being a good storehold of wealth, but it doesn't have the quality of allowing you to earn and build with sweat equity alone. You can't really stack sats anywhere with just sweat equity.
Hive, however, has that unique value prop. Web3 has that unique value prop. I am excited and scared about the state of the global economy. The one thing I am massively grateful for is having carved out a niche in this Web3 economy.
While central bankers try to fix this mess they created, we have our own web3 economy that we can build and take control of our own financial well being.
Stay calm and Hive on.
About LeoFinance
LeoFinance is a blockchain-based Web3 community that builds innovative applications on the Hive, BSC, ETH and Polygon blockchains. Our flagship application: LeoFinance.io allows users and creators to engage & share micro and long-form content on the blockchain while earning cryptocurrency rewards.
Our mission is to democratize financial knowledge and access with Web3.
Twitter: https://twitter.com/FinanceLeo
Discord: https://discord.gg/E4jePHe
Whitepaper: https://whitepaper.leofinance.io
Our Hive Applications
Join Web3: https://leofinance.io/
Microblog on Hive: https://leofinance.io/threads
LeoMobile (IOS): https://testflight.apple.com/join/cskYPK1a
LeoMobile (Android): https://play.google.com/store/apps/details?id=io.leofi.mobile
Delegate HIVE POWER: Earn 16% APR, Paid Daily. Currently @ 2.8M HP
Hivestats: https://hivestats.io
LeoDex: https://leodex.io
LeoFi: https://leofi.io
BSC HBD (bHBD): https://wleo.io/hbd-bsc/
BSC HIVE (bHIVE): https://wleo.io/hive-bsc/
Earn 50%+ APR on HIVE/HBD: https://cubdefi.com/farms
Web3 & DeFi
Web3 is about more than social media. It encompasses a personal revolution in financial awareness and data ownership. We've merged the two with our Social Apps and our DeFi Apps:
CubFinance (BSC): https://cubdefi.com
PolyCUB (Polygon): https://polycub.com
Multi-Token Bridge (Bridge HIVE, HBD, LEO): https://wleo.io