Erik Voorhees, CEO of ShapeShift, has posted on Twitter a post about the shameful national debt of the US, calling it “the largest financial bubble in the world”, which would certainly not be that of bitcoin.
Biggest financial bubble in the world, & the strongest example of greater fool theory (people buy gov bonds because they assume they can always sell them to someone else, regardless of ultimate ability of gov to pay). Every licensed financial advisor recommends owning this debt. https://t.co/x9kUgw4BFB
— Erik Voorhees (@ErikVoorhees) October 18, 2019
According to what has been reported, it seems that the CEO of the Swiss crypto exchange ShapeShift, through his tweet, wanted to clarify the facts around the word “bubble”, which has always been associated with the crypto world, and specifically with bitcoin, by pointing out that the national debt of the US is no exception, indeed for Voorhees its size is the worst in the financial world.
It is nothing new, in fact, that critics of the crypto world have taken the field with the definition of bubble based on the exponential rise in the price of bitcoin occurred in recent years, to be precise from $0.06 in 2010 to $20,000 in 2017 and that the current upward trend seems to be rekindling the same spirits.
But Voorhees replies to these critics, explaining that perhaps the reasons for such criticism are due to the desire of hiding some real facts.
It is not by chance that the most powerful nation of the G7, the US, seems to have a serious debt problem worth $22 trillion.
In this scenario, Voorhees points out how the US national debt corresponds to the greater fool theory, describing it in his tweet as follows:
“People buy gov bonds because they assume they can always sell them to someone else, regardless of ultimate ability of gov to pay”.
In essence, people are advised to buy this debt regardless of whether the US government has the capacity for repayment, and this is because the government can simply print new US dollars to cover its debt obligations and exacerbate fiscal irresponsibility.
This accumulation of unpaid debt causes unsustainability over the years, affecting the economic growth of the country.
According to a study by the World Bank cited in the report, it seems in fact that countries whose debt ratio exceeds 77% of GDP begin a phase of economic decline because for every percentage point above 77%, the cost of debt reflects 1.7% of the country’s economic gains.
Taking this theory into account, at the moment, the US debt-to-GDP ratio represents a 45.9% negative growth in the national economy.
Contrary to the criticism currently expressed about bitcoin, predictions arrive from the great supporters of the crypto world.
Just recently, the influencer John McAfee has raised the stakes regarding the price of bitcoin by stating that it could be worth 2 million dollars by the end of 2020.