What Bitcoin Did
Why Everyone Is Wrong About Inflation | Ansel Lindner
- Deglobalization and the Iran conflict: The erosion of post-WWII trust structures is forcing nations toward neutral settlement assets; Iran's acceptance of Bitcoin for Strait of Hormuz payments signals an early shift away from dollar-dependent systems.
- Deflation, not inflation, as the primary risk: Credit-based systems contract under deglobalization; deflationary busts pose a greater systemic threat than hyperinflation, though both could trigger currency backing by Bitcoin or hard assets.
- Bitcoin as a geopolitical hedge: Bitcoin's uncorrelated returns during crises (not crashing, not skyrocketing) align it with gold as a risk-off asset; its 24/7 trading makes it a leading price discovery mechanism.
- Suppressed volatility in current options regime: Market-maker hedging and options positioning have dampened Bitcoin's typical boom-bust cycles; a regime shift could unlock sharp repricing events rather than gradual moves.
- Future role as money, not currency alone: Bitcoin will likely function as base money backing sovereign currencies (e.g., the dollar backed by Bitcoin) rather than serving as global peer-to-peer payment rail; sidechains or Bretton Woods-style arrangements are more plausible than standalone adoption.
- US strategic advantage in Bitcoin adoption: The US government's 300,000 BTC stockpile and early talk of a strategic reserve position it favorably if countries adopt Bitcoin-backed currencies; this does not harm the dollar but strengthens it.