Kim Dotcom, a German-Finnish Internet entrepreneur and a renowned investor in crypto, stated that the US economy will inevitably crash in the years to come.
If US markets deteriorate in the long-term, as predicted by recognized economists including Peter Schiff and Nouriel Roubini, Dotcom firmly stated that crypto will appeal to investors as a robust and stable store of value alongside precious metals such as gold.
“US Empire now pays half a trillion dollars in interest payments per year to service its debt. US debt increases by a trillion per year. It’s a death spiral that cannot be undone. Self-destruction and USD collapse are unavoidable. Get out of USD and US stocks. Buy gold & crypto.”
Merit of Crypto
As the most powerful economy in the world, the US economy has a significant impact on Asia and Europe. When US stock markets suffered their worst sell-off in recent years by deleting all of the gains made in 2018, analysts reported that Asia markets have become more vulnerable to a potential crash.
Kathy Lien, managing director of FX strategy at BKAM, said:
“It’s not in an environment of positive growth trend so the pressure will be exacerbated in the emerging markets compared to the U.S. market. Unfortunately, this is the beginning. I think that when we get sentiment shifts like these, they always last longer than we would like to see and we could see the selling continue for some time.”
Therefore, if the US economy experiences a major crash by 2020 as many economists and major financial institutions like JPMorgan predict, then it will have a more drastic effect on stock, real estate, and financial markets in Asia.
The debt problem of the US mentioned by Kim Dotcom has been shared by both economists and government agencies like the International Monetary Fund (IMF), which recently emphasized that the US has to stop ignoring the seriousness of its federal debt held by the public.
“Even if you think that public debt just doesn’t matter to economic outcomes, the thing you have to admit is that when we hit a downturn, governments are less likely to take significant steps if the debt is as high as ours is now,” Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, said
Speaking to CNBC, Sonja Gibbs, senior director of the Capital Markets and Emerging Markets Policy Department of the Institute of International Finance, echoed the sentiment of Bernstine, stating that it will be more challenging for the US to stimulate growth and facilitate the expansion of its economy with its significant debt.
Unprecedented Growth Rate of Crypto
In the next 10 years, as the adoption of cryptocurrencies improves to a point in which merchants, retailers, and businesses embrace digital assets as a proper payment method, Dotcom added that then it will provide consumers with unparalleled financial freedom, increasing the value of digital assets.
“Crypto is replacing fiat at an accelerating rate. It’s still early days but within 10 years you can pay all your bills, goods and services with crypto. No more bankers and politicians gambling with your money at the bullshit casino. Encryption + Crypto = Freedom,” he explained.
Featured image from Shutterstock