Bitcoin Price and Crypto Markets Sunk, but Global Debt is Growing and Hits a New All-Time High
Global debt is growing at a very fast pace. It is currently approaching $244 trillion. Government debt has reached around 80% of the global GDP and private debt continues to grow as well, making things even worse.
According to the Institute of International Finance, debt is three times the size of the global economy. Although the world has registered a fast growth during the last years, the global debt-to-GDP ratio has also increased and it has reached 318 percent. The International Monetary Fund (IMF) released a report related to this issue in which they inform that the most indebted economies are the richer ones.
About it, the report explains:
“The top three borrowers in the world – the United States, China and Japan – account for more than half of the global debt, exceeding their share of global output.”
Fitch Ratings informs that the government debt has reached 80% of global GDP hitting $66 trillion during 2018. Debt in developing markets remained somewhat stable.
James McCormack, the global head of sovereign ratings, James McCormack, explained that government debt levels are high and that there are several countries very bad positioned for financial tightening as interest rates keep growing.
There are several cryptocurrency enthusiasts that believe that Bitcoin (BTC) is the answer to these debt problems that several countries are facing. As we can see in Venezuela or Zimbabwe, where individuals have been moving towards virtual currencies in periods of a currency crisis, something similar can happen around the world if there is a debt crisis.
According to a recent report released by the asset management firm Lucid Investment Strategies, Bitcoin could reach $10 million and become the new gold standard. This could help solve the world’s debt problems.
Bitcoin would be able to provide a sufficient reserve to alleviate the world debt burden.
“Bitcoin would be worth between $180 and $210 trillion. Assuming world debt had reached $500 trillion at that time, remember it has grown by 394% over the past 20 years, Bitcoin would represent a 40% reserve against the debt,” explained the company.
Bitcoin is a cryptocurrency that does not depend on other central banks or authorities and has a limited supply.
This can be very important in the future. With a limited supply and an increased demand, Bitcoin could experience pressure to keep growing.