Matthew Ventura ’22
With technology such as zoom, electric cars, and Artificial Intelligence/Machine Learning (AI/ML), taking over a variety of industries, we as a society must adapt to adversity and make way for all of these changes. We also must question what the future for finance holds and how people can capitalize on these changes as people did in the past. The year 2020 has been quite volatile for all things in life especially stocks and crypto currency and with the beginning of a sizable boost in bitcoin prices. This however, is no surprise considering the United States has been giving away stimulus checks like candy on Halloween.
As anybody with a basic understanding of economics would comprehend: the more money printed, the less value it accounts for. The average inflation rate per year in the US is around 2-3 percent. In the long run, however, the number will rise dramatically due to the national debt being increased from Biden’s $1.9 trillion dollar covid relief plan. What are investors’ solutions to massive stocks like Apple, Amazon, and Facebook plunging? If you guessed, buy the dip you are half right. While this might have been the plan of many people, those who have put their money in crypto are the biggest winners.
At the start of the pandemic, (March 12, 2020) Bitcoin (BTC) was in the price range of $5,000-$6,000 making it quite the expensive investment. Even more than another powerhouse stock Amazon (AMZN) at $3,500 per share. Despite this, word of stimulus packages, government help, and major stocks collapsing–people moved to crypto to try and beat inflation. This move paid off considering BTC has made an all time high of $40,519 per share. The catalyst of this huge price fluctuation according to investopedia has been: “Inflation and the lowering purchasing power amidst massive stimulus spending is driving people to store-of-value assets, including Bitcoin.”
What does this information mean for the future of finance? Well if you have been paying attention, crypto has skyrocketed and with more companies taking payments through these currencies and services like Paypal. Therefore, causing another increase in surge from this currency hence allowing it investors to cash in at such high prices.