Satoshi Nakamoto, the pseudonymous creator of the Bitcoin project, always expressed an inkling of mistrust and cynicism towards centralized institutions, including Wall Street and the incumbent government. This theme was only accentuated when Satoshi embedded a Financial Times headline, which discussed 2008’s Great Recession, into the coinbase of his brainchild’s first-ever block.

But over the years, the underlying value proposition of Bitcoin has been misconstrued, especially as ‘get rich quick’ schemes have become a sector mainstay. Yet, a number of leading crypto industry commentators have sought to bring this community back to its roots, embarking on a verbal and social war to push the anti-establishment narrative yet again.

Bitcoin Hedge Against Recession

Global Instability Presents A Bitcoin Bull Case

In 2017, it was no secret that a majority of Bitcoin investors bought the cryptocurrency for monetary gain. But, since the value of digital assets has scaled back, the remaining participants in this space have been given a fresh pair of eyes to observe this industry with.

Nobody knows this better than Alec Ziupsnys, better known as RhythmTrader on Twitter, who recently began to incessantly tout the underlying merits of Bitcoin in a rant-esque fashion. In one recent tweet, Ziupsnys remarked that the “near-record buildup in government debt,” rising levels of global economic and political instability, and inflation of fiat currencies should push an influx of buy-side pressure for the cryptocurrency.

While some would claim that Ziupsnys’ fears are overblown, as the macroeconomy is anecdotally on track to trend upward, the International Monetary Fund (IMF) itself has begun to express that there’s a cause of concern. At the World Government Summit in Dubai, IMF’s Christine Lagarde remarked that there are “four clouds” closing in on the global financial environment, even quipping that a “storm” might strike.

Lagarde explained that these clouds include the trade spats between the U.S. and China, quantitative tightening, Brexit, and, arguably most importantly, the “heavy debt” that governments, individuals, and corporations alike have garnered.

And with all this in mind, some libertarians and anti-establishment figures believe that a collapse of much of the legacy financial world is a possibility in the coming years. Some with this mindset, coupled with a crypto proclivity, such as the esteemed Max Keiser, have thus concluded that cryptocurrencies are a perfect hedge against a potential crisis.

Bitcoin Is A Credit Default Swap Against Fiscal Irresponsibility

Ziupsyns isn’t the only industry insider to be touting a form of this narrative. According to CNN Business, Travis Kling, a former asset manager at Steven Cohen’s Point72 turned crypto hedge fund head, remarked that Bitcoin is a perfect hedge against “fiscal and monetary policy irresponsibility” at the Cayman Alternative Investment Summit.

Kling, who has taken a full 180° from his life as a Wall Street hotshot, even went on to liken the flagship cryptocurrency to a credit default swap (CDS) against central banks, especially said institutions’ undying propensity to print money. CDS are, of course, what effectively single-handedly caused 2008’s financial meltdown. (Ironic, huh.) The investor, who now is the chief investment officer of the Los Angeles-based Ikigai, even commented that he’s wary of the level of debt that governments have found themselves embroiled in.

The Ikigai founder, who launched his fund in October of 2018, even stated that the monumental rise of enlisted quantitative easing (QE) strategies is “how you would write the script” for the adoption of cryptocurrencies, especially ones that are fully decentralized, the world over. In an earlier interview with TD Ameritrade, Kling chalked up this sentiment to Bitcoin’s unique nature as a non-sovereign, deflationary, immutable, and decentralized asset.

Although the fund manager seemed all but convinced that cryptocurrencies are on the verge of greatness, Kling did note that as it stands, there’s an “oversupply of crypto relative to demand.”


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Posted by Nick Chong

Nick has been enamored with cryptocurrencies since finding out about them in 2013. He now reports on crypto- and blockchain-related news for a number of leading outlets.


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