The past weeks were quite scary for a lot of investors. There was even a prediction saying that Bitcoin is about to head towards $4,000. Unfortunately, not everyone who invested in cryptos has that kind of risk tolerance. But if you ask other crypto experts in the field such as Tom Lee, he actually thinks that Bitcoin’s dominance of the industry simply proves that nothing is wrong.
Recently, Bitcoin was able to take half of the crypto industry’s market capitalization. That is despite the fact that Bitcoin has been trading around $6,300 recently. On August 7, the entire crypto market was at around $257 billion. In just five days around $43 billion has been wiped out of the market.
Considering the price of Bitcoin, many are hesitant whether or not to sell or buy some more. If you will ask the Controversial internet pirate Kim Dotcom, he believes that you should start investing in Bitcoin along with gold today. His reason is quite simple. He thinks that the US government is adding $1 trillion to its debt every year is leading towards another global economic collapse.
He mentioned in his tweet that: “1 TRILLION DOLLARS in additional US Govt debt PER YEAR! US spending is funded by lenders who will never get paid. US Empire will collapse followed by a world wide economic collapse. http://usdebtclock.org. Shift your USD into Gold & Bitcoin asap before USD becomes toilet paper“.
According to Kim Dotcom, Trump has started his term with the US already on the verge of economic collapse. And also, there are those economists who agree that the US debt situation is not really sustainable.
Though the tweet is somewhat controversial, it is not unfounded in any way. In the last ten months, the deficit climbed all the way to 20% straight from the Congressional Budget Office report. If you will look at the October to July numbers, spending has surpassed revenue by $682 billion. In addition to this, that’s $116 billion more than the same period for the prior fiscal year. This only means that the US economy is getting worse under Trump.
What Caused the Problem?
The deficit can be blamed by Trump’s agenda to cut taxes and his Congressional agreement to also increase spending. According to Trump, tax cuts can lead towards a better economy and it could reduce the deficit.
Though there is a 4.1% growth in the second quarter, economists believe that so much work has to be done in order to cut the deficit.
Kim Dotcom has a point. In fact, the deficit is set to hit $793 billion by the end of the year. And if things don’t change in the coming months, we can expect it to hit $1 trillion by 2019. This means that interest payments to service the debt will be increasing at a rapid rate.
Cryptocurrencies are now becoming a popular option for people dealing with an economic crisis. Since it isn’t tied to an economy, it can be an alternative to storing your assets. In fact, this is also a trend in places such as Cambodia and Venezuela.