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Brendan Bernstein: BTC isn't a bubble - it's a response to the very real bubbles...


The founder of the hedge fund Tetras Capital and former economist of Goldman Sachs Bank Brendan Bernstein argues that Bitcoin will help to burst the bubble of traditional finance. In a tweet on April 10, Bernstein supported the position of Bitcoin Foundation director Jon Matonis, who disagreed with the statements that Bitcoin is an economic bubble.

It is noteworthy that almost at the same time, the British bank Barclays compared the rise and fall of the Bitcoin price with the "infectious disease", while Time magazine saw in the possibility of legitimizing Bitcoin investment funds "a real sign that the Bitcoin bubble will burst."

On the other hand, the position of Goldman Sachs in relation to Bitcoin has become more flexible, especially after in February the startup Circle supported by it bought for $ 400 million a crypto-exchange Poloniex. Former employee of the bank, Bernstein went even further and decided to point out several "real" bubbles that appeared as a result of the existing financial system and the actions of world governments:

"Many claim that the BTC bubble has burst. BTC isn't a bubble - it's a response to the very real bubbles in our economy today. Govt control of money and the most important price in a capitalist economy--the interest rate--has caused distortions and true bubbles. Let's take a look"

Debt of 57 trillion dollars

Bernstein believes that the main reason for the formation of economic bubbles in China, the US and beyond is debt. According to him, in 2009, after the financial crisis, the total world debt increased to 57 trillion dollars.

Bernstein explains:

"China is on another level. With their maniacal focus on their 6.3% GDP growth target, debt has skyrocketed. Bank asset growth has been 450% since 2008 reaching $40tn."

China owns banking assets of $ 40 trillion and 11 trillion in GDP. For comparison, the US banking assets are 17 trillion dollars, and GDP - 19 trillion.

Despite ambiguous assessments of experts from Wall Street, analysts, including David Drake predict that at the end of 2018 the strong position of Bitcoin will return.

"…It is logical when institutions put money into crypto because their investments are 1,000x to 10,000x bigger than the average Joe and they will rise. And institutions are going to have to put their money in Bitcoin," he told last week.

"There is no other capital preservation token out there, like Bitcoin, because it has the largest liquidity in the world and it is the original one", explains Drake. 

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