Debt Ceiling Raise- U$💰 vs Bitcoin ₿- Is BTC the New Gold Standard.

Decentralised News

uDive into the world of macroeconomics and cryptocurrencies in this insightful video, as we explore the potential implications of a rising U.S. debt ceiling on the strength of the dollar and Bitcoin's role as digital gold.

Transcript

00:00what's up guys welcome back to the channel in today's video i want to just discuss a burning

00:07issue right now which is uh if the u.s once again raises the debt ceiling which it looks like

00:16that is the higher probability at this point uh people are now wondering what could actually

00:22happen to the strength of the dollar so this is what we'll be talking about and following that

00:29i will also be talking about how that outcome which is the raising yet again of the debt ceiling

00:36will actually strengthen the case for bitcoin in the long term so stay tuned and make sure you hit

00:44the like and subscribe button if you like the content you share on this channel um still out

00:52here in this uh lovely part of africa as you can see over to my uh one side you've got the sea in the

01:01horizon and you've got some beautiful uh pool waters right around this whole area where i am staying

01:09here in sandy zanzibar if you want to know more about what i've been getting up to here make sure

01:15you check out some of my previous videos uh there's a lot of adventurous uh things that actually

01:21i'm attracted to that's why i've been on this island for almost a month now and uh just pretty much

01:28having fun getting around meeting the cultures meeting the people exploring the scenes seeing the

01:34wildlife seeing the nature swimming in the ocean going to the beach parties and uh doing all of these

01:42interesting things so make sure you keep subscribed to the channel hit that notification bell if you

01:49want to stay obviously abreast of everything that is taken on uh here on decentralized news but without

01:57wasting any time let's talk about the issue at hand which is this raising of the debt ceiling

02:02which actually allows the u.s government to essentially borrow more money to pay its existing bills

02:08it does not however obviously authorize new spending but it ensures that the u.s government

02:14can actually fulfill its financial obligations and when it comes to the strength of the dollar

02:20the potential effects of raising the debt ceiling are complex and do depend on a multitude of factors

02:28including the actual state of the economy the response of our financial markets and also the

02:34actions of the federal reserve on top of the overall confidence of the u.s um of our people

02:42in the u.s government in its actual fiscal policy so long term we can look at a few factors such as

02:50the potential for short-term stability obviously the markets have been really really rocky over the

02:57last few weeks if you've been following whether that is in the crypto markets whether that is in the

03:02stock markets they've just generally been uh a lot of uh hawkishness a lot of uh volatility because

03:09uh people are looking or the markets rather are looking for uh some clear direction of uh where things

03:16could go uh as this debt ceiling um debacle was uh obviously heating up and uh as uh all of those

03:26things unfold people still want to know obviously in the short term like i said raising that debt limit

03:33could bring that stability to the dollar which is uh what people would expect because it then removes

03:39that immediate risk of a u.s government default and a default could severely damage uh the country's

03:47credit rating potentially obviously also rolling effects coming out of that being a thing such as

03:55maybe bringing on the onset of another financial crisis which is likely uh to lead into uh another

04:03sharp decrease in the value of the dollar which has been significantly strong against all other fiat

04:09currencies over the last year or two uh which doesn't necessarily correlate to its uh strength in

04:16general which is something that obviously we will talk about when we talk about bitcoin but again

04:21another factor is the possible long-term weakening uh in the long term uh repeatedly raising the debt

04:28ceiling and accruing more debt could actually put downward pressure on the dollar so the strength

04:34of a currency is often linked to the perceived economic health of that country that's issuing that

04:41currency and if investors believe in the u.s and uh start to see that they are now accumulating too much

04:49debt and they start doubting the government's ability to then manage that debt effectively they may

04:55lose confidence move their investments elsewhere which could leave uh lead also another um

05:02sort of consequential um decrease in the demand for a dollar lowering its value we've seen

05:11uh a lot of uh news stories going around over the past a few months about the bricks nations coming in

05:18and uh maybe reconsidering uh issuing a goldback currency or um the china russia doing trade uh exclusionary of

05:30the usd in other currencies and things of that nature and just a lot of talk about the shift away from the

05:39dollar but within that whole time frame we've also seen the dxy and the dollar itself remain quite resilient

05:46uh as compared to the other fiat currencies but inflation considerations are also something that

05:54have to be noted here because if the decree the increasing actual demand uh for borrowing is uh used

06:02to finance these large amounts of government spending um then you could see an uptick in inflation which is

06:11something the fed has been trying to fight or apparently trying to fight uh by raising interest

06:18rates which could generally weaken the dollar however um this also depends largely on the state of the

06:26economy itself uh obviously if there's a significant slack in uh employment figures say high unemployment

06:35the increased spending might not lead to inflation necessarily so you also have this issue of interest

06:40rates the actions of the federal reserve also do come into play here if uh they do raise interest

06:47rates coming into this next month where uh the market was expecting uh potential pause uh you know then

06:55it could then strengthen the dollar again conversely if they do actually pause uh then this could

07:03stimulate the economy putting downward pressure on the dollar as well so it is obviously important to to do

07:10you know kind of remember just uh that uh the currency and uh its strength is determined by

07:18several other numerous factors not just the debt ceiling or government borrowing necessarily and

07:23these factors could range from things like trade balances economic growth rates uh differences in

07:30interest rates as well political stability and so much more so they um they just kind of

07:36finalize that situation well you see that you know while you've got the debt ceiling being a very very uh

07:43important issue here it's not uh the the only issue uh that has any impact on the strength of the dollar

07:51itself so now to the main part of this video which is uh how to actually uh gauge what the situation could be

08:01conversely when it comes to uh bitcoin and its value proposition obviously this is something that is

08:07now considered digital gold and uh a hedge against the traditional financial systems and monetary policy

08:15policy decisions as well of our governments such as these changes to the debt ceiling this is actually

08:22due to uh the fixed supply of bitcoin the decentralized nature the independence from particular government

08:29government fiscal policy at this point so raising the debt ceiling could potentially strengthen the case

08:34for bitcoin in many ways potentially uh since like we said bitcoin is seen as an inflation hedge

08:41uh if they increased a borrowing allowed by the erasing of the debt ceiling is actually used to finance

08:48uh government spending it could lead to inflation inflation decreases the purchasing power of a currency in this case the us dollar

08:56then bitcoin bitcoin obviously with this cap supply uh in relation to the dollar would be measured

09:03significantly higher and uh the purchasing uh power of a bitcoin might then uh real you know in relation

09:12also uh see the value going up uh much more in a dramatic fashion which a lot of people do uh suspect that

09:20that could be the case leading up to also things uh like the bitcoin halving cycle and

09:26i just uh um maybe uh even uh a state where we see the uh fed starting to cut interest rates in the

09:34next quarter or so so the weakening dollar in the long term occurring more debt by raising the debt

09:41ceiling could potentially weaken the dollar as the dollar weakens bitcoin may become more appealing to

09:47investors as a store of value and a medium of exchange particularly for those trying to do international

09:52transactions and settlements another thing is you can see the obviously increasing distrust in traditional

09:59systems and this continual raising of the debt ceiling could lead in a um a very massive lack of

10:05confidence in the trade fi uh traditional finance sector and uh this could push some individuals and

10:13investors towards a decentralized currency such as bitcoin also the global reserve status of the us which is

10:19continuously being challenged uh could uh lead other people to not necessarily choose another um

10:28currency such as the yuan as a global reserve currency but instead tend to a decentralized form of

10:34money so you also have these low interest rates where you know if the fed now starts to cut

10:40and lower interest rates over the next few months years then this could also see um the dollar

10:48debased uh debased uh quite significantly which would uh see also high risk uh assets maybe appreciate

10:56more and even though bitcoin depending on how you look at it is considered by many still a risk a risk on

11:03asset um i i believe the opposite really but i think this could also potentially benefit it massively so

11:12it's always important to understand that obviously these things come with uh all sorts of risks as well

11:18so bitcoin is not only the um the most non-risk uh asset out there compared to fiat so you know it's

11:26just about understanding the two different value propositions and being able to make informed decisions

11:33for yourself in terms of how you allocate your capital in your own portfolios but um if you want to learn

11:42more about what really keeps me up at night what really inspires me what keeps me going lately then

11:49do go to defi-millionaire.com which is my website where you can get the free copy of my new book defi

11:58millionaire it's the ultimate guide on how you can use decentralized finance on your way to finding your

12:06own financial freedom and empowering yourself as such so make sure check out the links in the

12:12description to all the platforms that i like to use and trade on i like decentralized non-custodial

12:17exchanges in particular gains trade g trade mux apex protocol sin futures these are all platforms that

12:28anyone can get started uh on easily if you're willing to just uh kind of go past that first hurdle of uh

12:39um just this attraction to centralized exchanges uh by virtue of them being some kind of companies that

12:47are registered in some particular jurisdictions that you can say you can trust because with a non-custodial

12:54finance you are in charge of your assets you do not have to trust a third-party custodian we saw what

13:00happened over the last cycle in crypto where a lot of people lost their money to ftx uh and all of these

13:09platforms that went bust so this is why i do recommend decentralized exchanges but also make sure you check

13:17out the other links to my other books tokenized trillions and blockchain applied they will teach you all you

13:23need to know about real world asset organization on the blockchain and the different use cases of

13:28distributed ledgers across multiple sectors and industries other than that go to our telegram go to

13:35our discord server like share subscribe turn on the notification bell i will see you guys in the next video

13:53you

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