Bitcoin Boom To Cause Deflation? ‘It Will Make Everything More Affordable,’ Counters Prominent Advocate
By Benzinga
Controversial influencer Andrew Tate questioned how Bitcoin’s (CRYPTO: BTC) rise might disrupt traditional capitalism and investment models, prompting responses from the Bitcoin community that defended the cryptocurrency’s transformative impact on markets and society.
Tate’s Argument: Capitalism At Risk?
In his video on X on Monday, Tate criticized Bitcoin’s dominance as an investment, stating that its unparalleled returns are causing capital to flow away from traditional assets like real estate and businesses.
“How do things continue to get built when the world wakes up and realizes that Bitcoin’s the best investment?” Tate asked, highlighting concerns about capital misallocation and the potential for deflationary pressures to stall economic growth.
Tate, known for his provocative commentary, suggested that Bitcoin’s deflationary nature could lead to a breakdown in economic activity.
“Deflation will crash an economy quicker than inflation,” he claimed, arguing that if people expect prices to fall, spending and investment could grind to a halt.
Also Read: Michael Saylor Urges US To Ditch Gold For Bitcoin: ‘Sell The Past, Own The Future’
The Bitcoin Community Responds
Stack Hodler, a well-known Bitcoin advocate, countered Tate’s concerns in a detailed thread on social media.
“You just articulated one of the best parts about Bitcoin,” he said. “It will make everything more affordable.”
Hodler argued that Bitcoin discourages capital misallocation by providing a superior store of value compared to traditional assets like real estate or speculative startups.
“Without Bitcoin, you’re forced to invest in a bunch of random stuff to grow your purchasing power. That inflates the price of everything for everyone, including homes,” he explained.
By shifting investments from inefficient assets to Bitcoin, Hodler suggested that market prices would reflect true value, driving down the cost of necessities like housing.
“Asset holders need to adapt or die,” he added, predicting that Bitcoin’s rise would force traditional asset classes to reprice significantly lower.
The Debate Over Deflation
Tate’s assertion that deflation is harmful also drew a pointed response.
Hodler acknowledged that deflation poses challenges for debt-based economies but argued that technological advancements like AI and robotics would naturally lead to deflation regardless of Bitcoin’s influence.
“When AI and robots are doing 90% of our work, that’s massively deflationary because they can do things way faster and cheaper than humans,” he noted.
Bitcoiners, Hodler said, are already benefiting from this deflationary trend. “We’re getting the full benefit of humanity’s increasing productivity,” he said, contrasting it with fiat systems that rely on inflation to manage debt.
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