How does the monetary supply affect cryptocurrencies?
The show Macro Markets, hosted by Marcel Pechman, which airs every Friday at 12 pm ET on the Cointelegraph Markets & Research YouTube channel, explains complex concepts in layman’s terms and focuses on the cause and effect of traditional financial events on day-to-day crypto activity.
In today’s episode, crypto analyst Pechman discusses the fundamentals of money, including how to calculate supply, the effects of savings deposits and money market funds, and how central banks can inflate without effectively “printing money.”
Pechman explains why near-zero interest rates and reduced financial institution reserve requirements benefit risk assets, such as cryptocurrencies, so much. The video then compares the broad monetary supply change in the United States to Bitcoin’s (BTC) price — some impressive charts you should not miss.
Following a brief recap, Pechman explains why governments are doomed to continue inflating the monetary supply and why it is impossible to predict how long it will take to affect stock markets and crypto.
The Macro Markets’ next segment focuses on the housing market, a staggering $260-trillion asset class that has historically been able to keep up with monetary debasement. Pechma reveals the ambiguity surrounding the potential for delinquency, the rise in mortgage rates, and the connection to the housing crisis of 2008.
Two hypotheses are presented to illustrate how realistic it is for a portion of the trillion-dollar housing market to flow to cryptocurrencies and why stocks and gold are unlikely to be able to absorb all of the value coming their way. This concludes the segment.
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