A Case Against Bitcoin

When buying bitcoin, I searched for optimistic evidence on why it's good. I now look for reasons to no longer hold (while still holding).

I went to subscriber pals for the answers. Here's an interesting case:

How Easy Is It To Replace The Global Reserve Currency?

Money printing and inflation are the biggest arguments against the US dollar. It's also a BIG reason to buy bitcoin. Here’s perspective on the evidence.

This is a chart of the M1 money supply in the United States (Bitcoiners like scaring people with it):

It's scary to look at, but here's the kicker:

A large part of the chart's increase is not from money printing.

No. I'm not drunk. This is why:

  • M1 Money Supply = money readily available (cash, coins, and checking accounts)
  • M2 Money Supply = saving accounts and retail market accounts

Before the pandemic, you could only make 6 withdrawals from your savings account (part of M2)

April 2020, The Fed lifted the rule by allowing unlimited saving account withdrawals. This helped people get cash during the pandemic:

"Beginning with the May 2020 observation, M1 will increase by the size of the industry total of savings deposits, which amounted to approximately $11.2 trillion."

The rule change affected the relationship between M1 and M2 supply. All of a sudden, every savings account was considered a checking account.

Trillions of dollars in savings got reclassified as M1 money supply––spiking the chart you see above. It did not (entirely) come from the Fed printer going brrrrrrrr.

Of the $14 trillion M1 increase, $11.2 trillion (80%) came from an accounting rule change. Not money printing.

Yes, the Fed’s antics will have consequences, but we shouldn’t fall for false narratives. Get other perspectives.

If this pandemic has proved anything, it shows how resilient the US dollar really is. Bitcoin still hasn't reached mass adoption and it's much further from replacing the Global Reserve Currency. There are many obstacles to get through before that happens.