Guest commentary: Why Bitcoin will rise strongly in 2021
Marc Friedrich is a financial expert, multiple bestselling author, sought-after speaker, thought leader and free spirit. His latest book, „Der größte Crash aller Zeiten“ (The Biggest Crash of All Times), is the number one SPIEGEL bestseller. Many of his forecasts have come true. With his fee-based consultancy Friedrich Vermögenssicherung GmbH, he advises private Bitcoin Era individuals and companies on Bitcoin and other cryptocurrencies. More information at https://friedrich-partner.de and on Twitter: @marcfriedrich7 and Instagram: @marcfriedrich7.
„I expect a new all-time high before Christmas and new highs in 2021 – six-figure prices by the end of 2022!“
So I had finished this article in early December and then left it for various reasons. Now my prediction has actually been exceeded. Why bitcoin has risen so much and why we will soon see new highs, you will find out in the following lines.
Inflation is coming – central banks must keep printing
Since the near-death experience of the monetary and financial system in 2008, we have been in a state of financial emergency. Triggered by greed, speculation and hubris, central banks have imposed unprecedented, historic measures worldwide. Interest rates have been lowered to record levels and in some cases are already in the minus range. At the same time, the money floodgates were opened and the markets were permanently supplied with cheap liquidity. A veritable tsunami of money, leading to ever larger asset bubbles, for example in real estate or shares. Almost 18 trillion US dollars of all government bonds currently have negative interest rates, as a Bloomberg chart shows.
Bloomberg chart on the total volume of all government bonds worldwide
Central banks worldwide are in a precarious situation: for example, the US Federal Reserve. It now has a gigantic 7.2 trillion US dollars on its books. That corresponds to 36 percent of the GDP of the world’s largest economy. The European colleagues at the central bank in Frankfurt are also in no way inferior to the USA. Here, too, the chart rises parabolically. 6.83 trillion euros or 68% of the GDP of the Eurozone is already on the ECB’s books.
At the same time, public debt is rising to new heights worldwide. 277 trillion US dollars is the total debt worldwide. That is 350 percent of the world’s GDP. The US alone is in the red to the tune of 27.3 trillion US dollars, 128 percent of its own GDP.
For these reasons, the central banks can no longer raise interest rates in the existing monetary system, otherwise bankrupt countries would go bankrupt, companies would collapse, the economy would be strangled, investment bubbles would burst and unemployment figures and debts would explode. For this reason, the destructive downward spiral of interest rate cuts and money printing will have to continue. Until the bitter and very expensive end. Because the collateral damage is becoming more and more devastating and expensive. Not only monetarily, but also politically, economically and socially.
Against this rampant debt-making and money-printing without interest and reason, investors and savers need values limited by nature or mathematics to protect their purchasing power. One of these is Bitcoin.