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50 years ago yesterday, August 15, 1971, the President of the United States, Richard Nixon, changed the world with a monetary policy that also led to the creation of Bitcoin. It sounds like a stretch, but it all started with the dollar being unanchored from the gold standard.
The loss of its peg to gold has taken the dollar down a dangerous slope from which it will probably never be able to recover. The problem that began in 1971 is spiraling out of control as more and more money is produced from nothing but debt. If the global reserve currency continues to move in this direction, the complete collapse of the economy is possible unless a new normal emerges. Could this new standard be Bitcoin?
WTF performed in 1971
Much happened in 1971, but few have the same lingering impact as US President Richard Nixon ending the convertibility of the US dollar into gold.
Prior to that, the United States had to maintain the US dollar at a price indexed to gold to ensure convertibility internationally. But to fight inflation and growing wage differentials, the Bretton Woods monetary system came to an end.
Related reading | Gold vs. Bitcoin chart looks like Bull Run has barely started
Without a dollar tied to the price of gold, new dollars have entered the monetary system in abundance since then and they have caused the price of gold to skyrocket from the stable rate of around $ 35 for decades. over $ 2,000 recently.
In 1971, the dollar was de-pegged from the gold standard | Source: XAUUSD on TradingView.com
It is not exactly the price of gold that is rising, so to speak, but the price of the dollar that is falling against the gold standard – which until recently was the strictest and most stringent monetary system. rare never used.
Bitcoin standard emerges 50 years after dollar crash
But today things are very different. We live in the digital age, where coins are rarely traded at retail or in banks, and instead the market has started to suggest that a new standard is emerging: the Bitcoin standard.
Bitcoin is disrupting the precious metal since its debut | Source: XAUBTC on TradingView.com
Books have been written with such a title, but it’s the price chart comparing gold to BTC that really shows how the situation is developing.
The complete divergence in the growth of value between the two in relative dollar terms is almost as noticeable between XAU and BTC as it has been between gold and the dollar since 1971.
Related reading | Gold fractal bodes well for Bitcoin if Bull Flag is confirmed
Bitcoin is undoubtedly disrupting the gold standard, and it then searches for the dollar itself. Even since the emergence of Bitcoin, the dollar has done more and more to move away from its old anchor to precious metals, and perhaps could itself go digital in the days to come.
The gold standard existed because there had never been a better monetary system before. Today, the Bitcoin standard is here, and it is thanks to decisions made some fifty years ago that still have a dramatic impact on society today.
It’s all thanks to a guy who’s famous for saying “I’m not a crook”. #Thank you Nixon # wtfhappenedin1971 #Bitcoin pic.twitter.com/kxcfwruqdK
– Tony “The Bull” Spilotro (@tonyspilotroBTC) August 16, 2021
To pursue @TonySpilotroBTC on Twitter or via the TonyTradesBTC telegram. The content is educational and should not be taken as investment advice.
Featured image from iStockPhoto, Charts from TradingView.com
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