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November 25, 2020

In Conversation With

Discussing the Austrian School of Economics with Dr. Saifedean Ammous


Dr. Saifedean Ammous published “The Bitcoin Standard. He discussed the Austrian School of Economics thinking and the interrelationship between Austrian Economics and bitcoin.

(13:29) “I think part of the reason that mainstream economists have been so dismissive of bitcoin is that it flies in the face of how they would like to understand money from the aspect of the government control, the state theory of money. And the second point, why it makes sense in Austrian Economics and why it doesn’t make sense from a mainstream perspective, is the issue of the limited supply. This is why I became fascinated with bitcoin when I first heard about it.”

Dr. Ammous believes that hyperinflation is a result of horrific monetary policy and it doesn’t happen because of bitcoin, adding:

(19:43) “If we do go through hyperinflation, I think arguably bitcoin would be the solution to this because bitcoin provides people with the alternative that if those things happen, you can get your money out of your country. So bitcoin would benefit from it but only to the extent that people benefit from bitcoin.”

Fidelity Digital Assets published a report saying that the number of institutional investors in digital assets is growing significantly alongside the number of investors who believe digital assets should be part of their portfolio. Their adoption number is 36%. (24:42) Dr. Ammous’ assessment is that “it’s way too high.” But he agrees it’s a positive directional indicator, saying:

(25:54) “I think that the interesting thing is that people are definitely hearing about it more and more…If you’re an asset manager at this point, you’re looking around at assets that are non-correlated, you look around at previous performance. Every year, the case [becomes] more and more compelling. Even after you get the occasional one very bad year, you still look at it in the long run, the performance. I think it’s only a matter of time before they start asking questions more and more and get into it. But in terms of current volume, I think it’s an exaggeration but it’s a good indicator of where we might be headed.”

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Gerelyn Terzo
Gerelyn caught wind of bitcoin in mid-2017 and after learning about the peer-to-peer nature of Satoshi's creation has never looked back. Previously she covered institutional investing and fintech for several major trade publications. Gerelyn resides in Verona, N.J.

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