Why The $1 Trillion Coin Is Another Reason To Stay Long Bitcoin
October 09 2021 - 1:00PM
NEWSBTC
In the past weeks, the Bitcoin bulls have shown great strength
pushing BTC’s price back into the $50,0000. In the meantime, the
members of the U.S. government have re-opened a pandora box in an
attempt to elevate their debt ceiling: to mint a $1 trillion coin
and prevent it from defaulting on their national debt. Related
Reading | Inflatable Bitcoin Rat Makes Comeback Due To Federal
Reserve Ethics Issue As Peter St. Onge, a Ph.D. and economic
research fellow at Heritage Foundation, explained in a post called
“Trillion Dollar Coin: Rocket Fuel for Bitcoin”, the measure has
been deferred at the expense of $480 billion taken from the
American public, but BTC and its holder have already benefit. As
Onge pointed out, the U.S. government has been pushing the limit on
their debt since several decades ago. In fact, it’s not the first
time a government official has proposed to mint a $1 trillion coin
and keep it on the U.S. Treasury balance sheet to elevate their
debt ceiling. In that sense, the researcher referred to the $1
trillion coin as a “gimmick to exploit a legal loophole”. The
decision has been postponed at the moment, but the U.S. government
could return to consider it if the economic situation worsens.
Thus, making Bitcoin much stronger. Related Reading | Fed
Chair Says Still “Working on” Digital Dollar as China Pulls Ahead
The scenario where the U.S. decides to issue a $1 trillion coin
could have devasting consequences for the global economy due to the
status of the USD as the global reserve currency. Onge said the
following on the chaos that could ensue: (…) the end result of a
trillion-dollar coin is radically higher money creation, radically
higher government absorption of real resources from the private
sector, and a federal government that has finally maxxed out the
credit card once and for all. Bringing them at last face to face
with the universe’s ultimate debt ceiling: the bond market. How
Bitcoin Has Benefit From The $1 Trillion Coin The fact that the
discussion to mint a $1 trillion coin is actually being considered
by the U.S. government, is already a bullish factor for Bitcoin,
the research claimed. BTC was created as a result of a financial
crisis and a lack of trust in the central authorities that rule
over the global monetary supply. In that sense, Bitcoin operates as
insurance, a way to opt-out of a system that seems to be trap in a
“pattern of destroying the world every decade”, as Onge said.
Inflation, one of the main problems that came out of the COVID-19,
could be significantly worse if handle by other branches of the
U.S. government. The research said: (…) if you think central banks
like printing money, just wait til you meet Congress. And, as
corollary, if Bitcoin’s price likes the Fed’s money printers, wait
til they meet a Treasury that shoots out trillion-dollar scrip for
sport. Ultimately, Onge rules out the possibility of a $1 trillion
coin, but its symbol of inflation and lack of trust in the
government stands. Thus, it becomes just another reason to hold
Bitcoin. Related Reading | Bitcoin Back To $64K? Why This Time
The Bulls Have The Winning Edge At the time of writing, BTC trades
at $54,976 with a 1.3% profit in the daily chart.
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