The current pandemic crisis is marked by non-conventional monetary policies resulting in massive injections of new liquidity by central banks to support the economy.
Bitcoin is a good hedge against the future negative effects of these types of macroeconomic policies and we are therefore bullish on the asset.
In the short term, we think bitcoin will be democratized due to the entrance in the market of centralized actors aiming to provide cryptocurrencies, digital corporate currencies or digital central bank currencies to their clients or citizens. The centralization aspect of such actors could artificially re-create the type of issues bitcoin was designed to solve such as censorship, trust in intermediaries and control. Therefore we see in the long term a wave of emancipation from such actors to reappropriate the original philosophy of bitcoin accompanied by a higher usage in daily transactions thanks to the first democratization.
The standout moment in the last 12 years, in our opinion, was the 2017 bitcoin bashing when large institutions like JPMorgan or politicians suffering a trust crisis were virulent about bitcoin. Today the same companies and countries have plans to work in one way or another with bitcoin and have created or are working on innovative regulatory frameworks.
Bitcoin showed the world that software can be open source, censorship resistant, decentralized, permissionless and borderless. It has attracted many talented developers and entrepreneurs who found those aspects appealing or revolutionary. In response, this worldwide community then devised innovations in a lot of different aspects of bitcoin including scalability, privacy, governance or financial inclusion. The philosophy of bitcoin remained present as well in the decentralization of crypto exchanges or lending platforms as we have seen recently with the DeFi craze.
