Bitcoin is increasingly proving its usefulness, not only in the world of trading and speculation but also at the political level. Travis Kling, Chief Investment Officer (CIO) at Ikigai Asset Management told TD Ameritrade that Bitcoin is gaining ground as a kind of safe investment in the face of problems caused by bad government administrations.
“This is a hedge against irresponsibility from governments and central banker …The world is waking up to the value of [bitcoin as] a hedge against the largest monetary policy in human history – quantitative easing.”
He explained that Bitcoin won’t stop rallying because the current geopolitical circumstances are perfect for reinforcing its appeal to investors and people seeking to escape the monetary policies of their respective governments. The clearest example is precisely “the increase in stress from what’s going on with the trade war”.
Hearing Mr. Kling talk about this “Cold War” between the United States and China strengthens a theory that has run among experts and enthusiasts. After the United States announced sanctions against China and China responded with a similar measure, the traditional financial markets suffered a sharp drop while Bitcoin started a rally that took it from $4000 to $8000 in a few days.
Bitcoin is Better Than Fiat
He explained that in recent months, central banks have had a kind of erratic policy, something frightening for many investors. In the United States they talked about markets being in “autopilot” and then several central banks emulated this policy. For the renowned investor, “Bitcoin is an insurance policy against that … It is a way to step outside all of that”.
Kling said it is difficult to know for sure what is the
cause of this new rally, however, he explains that there are certain
differences when compared to 2017. The expert analyst thinks one of the
main aspects to take into account is the increase of hedge funds and
institutional investors that have put large amounts of money in the crypto market,
generating heavy long positions.
Mr. Kling believes this tendency is difficult to reverse since generally when observing the behavior of the markets, more and more small investors replicate this type of strategies, which in turn will increase the effect of the trend in the medium term.