The United States Federal Reserve embarked on a massive dollar printing journey in 2020, necessitated by the need to deliver financial stimulus packages to American taxpayers during the Covid-19 pandemic wave.
In 2020, the United States printed 35% of the dollars in circulation.
According to reports, that year’s print represents 35% of all dollar printing in the history of the United States Federal Reserve.
The leaders of the two major parties believed that this was necessary because the COVID-19 pandemic had caused an unprecedented economic downturn. Because of this massive dollar printing, currency circulation increased from $15 trillion to over $19 trillion in 2020 alone.
Although the American government was successful in providing stimulus funds to beloved citizens during a difficult time like that, it is important to remember that there was always a cost to pay for the massive dollar printing.
In theory, when there is an excess of any currency in circulation, it leads to inflation. The situation is similar to that of the United States of America, where a record massive print resulted in a never-before-seen level of inflation.
Bitcoin and Ethereum profit from dollar inflation.
While this appears to be very bad news for the US economy, it has also opened the door for digital currencies such as Bitcoin and Ethereum, which are seen as an accessible and viable hedge against inflation.
“The federal government may be making the ultimate case for bitcoin and decentralized currency,” according to a report, “with other world governments also rushing to print as much inflating currency as possible.”
“With the dollar being an ever-changing measure of wealth, the uncertainty surrounding cryptocurrency and precious metals may eventually pale in comparison.”
Fear of rising inflation rates has played a significant role in crypto adoption by top institutions such as Tesla, Meitu, and others. According to a previous report from us, Bitcoin has been deflationary over the last decade, while the value of the US dollar has been rising.