Coinbase’s former CTO thinks unsustainable US debt levels will inspire a generation of Bitcoin diehards.
Balaji Srinivasan – the popular venture investor and Coinbase’s former Chief Technology Officer (CTO) – believes Bitcoin Maximalism is due to gain steam as a philosophical and economic belief system.
In a Twitter post on Wednesday, the entrepreneur argued why faith in the existing financial system is bound to erode over time as the U.S. dollar inflation pushes a new generation into Bitcoin.
Unstoppable Inflation
According to the U.S. Bureau of Labor Statistics, twelve-month consumer inflation in the United States rose to 3.5% in March, now having stayed substantially higher than the nation’s 2% target for three years straight.
While the Federal Reserve has raised its policy interest rate substantially to fight higher prices, Balaji claims this method brings harsh side effects for consumers – such as higher interest payments on loans and cars.
“There’s really nothing they can do,” wrote Balaj. “High rates mean the regime is piling up interest costs in an unsustainable way, so they can’t keep rates elevated forever.”
Federal Reserve data shows that personal interest payments in the U.S. have risen from $240 billion in 2021 to $520 billion today.
Meanwhile, Bank of America research shows that U.S. Treasury interest payments have skyrocketed to $1.1 trillion per year, and are projected to reach $1.6 trillion by Q4 2024 if rates remain stable. If the Fed were to cut rates by 150 basis points before then, such payments would still rise to $1.2 trillion.
Adding to its interest burden is the nation’s continual debt issuance through notes, bonds, and bills, which rose back to $7 trillion in Q4 2023. According to the US debt clock, the nation’s total debt burden has now surpassed $34.6 trillion after Congress voted to suspend its debt ceiling last year.
A Bitcoin Maximalist Revolution
Balaji believes the country’s debt levels will lead it to print “gigantic quantities of money” – a dangerous prospect given that 64% of 18 to 29-year-olds view inflation as their top national issue.
“That is the stuff of which revolutions are made,” he said. “That’s why it the next one really is the people vs the government, the network vs the state, and — most of all — the dollar vs Bitcoin.”
“I am no maximalist, but Bitcoin Maximalism will rise,” he added.
Bitcoin maximalism is a movement and belief system that views Bitcoin as superior to all other financial assets. That includes precious metals, fiat currencies, bonds, stocks, and even other cryptocurrencies.
Michael Saylor – executive chairman of MicroStrategy, the world’s largest corporate BTC holders – has referred to himself as a Bitcoin maximalist.