Why Bitcoin Could Explode As The Dollar Loses Value | Bitcoin in Brief, Episode 7

quite extensively in our previous conversation, but in a very high level, it's the debasement trade being back on.

For the first time, listeners who are hearing what is the debasement trade, it's essentially when the bond market is flashing higher and higher yields, which means that they're expecting a higher term premium because they're anticipating inflation.

It requires some level of intervention from the Treasury Department or the Federal Reserve.

The Federal Reserve can really only control or influence the short end of the yield curve, which is your short-term T-bills and your one, two, three-year yields.

bonds, whereas the Treasury Department is responsible for off-the-run illiquid bonds in the 10, 20, 30-year category.

And right now, people are just not feeling comfortable holding US bonds, and so they're selling off the US Treasuries, which then drives yields even higher.

That's not sustainable for the US government, especially because they've crossed over $40 trillion in national debt, and they want to keep their debt burdens or their interest expense as low as possible.

So, Treasury Secretary Scott Besson came in and said, we're going to buy back our long-dated debt and to do so, they're going to essentially max out the credit card to pay for the mortgage.

That was a term that really lit up across X and other social media platforms and Google search and AI search, people looking up what the debasement trade is.

And people are looking for monetary alternatives, particularly Bitcoin and gold.

And gold had a pretty good month and Bitcoin has had even a stronger month.

And it's just pretty much showing a lack of confidence in the US dollar.

Because if I'm a sovereign nation, such as the US, the mighty United States, I'm more likely to sacrifice my money.

than I am to sacrifice my bond market or my stock market.

I would make that trade every single day.

Devalue the currency because you want to keep your asset holders wealthy, especially people who are holding US government debt or holding US equity assets.

You want to keep them pleased.

And that's exactly what's happening right now.

And people are looking for alternatives.

Hence why Bitcoin has had its third best

August ever.

And Bish, I want to get to why we often refer to Bitcoin and gold as the debasement trade in a moment and kind of touch on an article that you guys put out earlier this week.

But Kevin Walsh, who's the new Fed chair, had his meeting at Jackson Hole last week.

What did we learn from what he had to share? I believe it was a very hawkish kind of a statement.

There's now, I guess, a better than average chance that they're going to actually increase interest rates.