Kim Dotcom, the entrepreneur with German and Finnish citizenship and creator of mega, has publicly said that gold and cryptocurrencies are a better long-term better investments than the US dollar. He said:
“Trust me. Buy crypto and gold. Your USD is worthless. With the collapse of the US economy, all old Fiat currencies will collapse. The times are getting tough. But you’ll be fine if you make some of your investments in preparation for the break-in of the system. The big crash comes to 100%.”
Value of USD
The value of cash and all other forms of money depends on the ability to function as a medium of Exchange and also the confidence of the people. If the U.S. dollars can be used for example to the purchase of real estate and services, it has a monetary value.
As the former Goldman Sachs CEO Lloyd Blankfein said paper currency like the US dollar is valuable because, under the control of the Governments, the people are forced to use the money as a means of payment. In a sense, the value of paper money can be attributed to whether a State has control over its own financial system. The people lose confidence in the currency and the State loses control, that can be the cause if the value of the currency significantly decreases.
Recently, the Turkish Lira slumped after Donald Trump announced the introduction of punitive tariffs for Turkey. To prevent the devaluation of the lira, the financial authorities of Turkey carried out immediately strict controls to prevent the liquidation of foreign-exchange.
Dotcom is of the opinion that the increased indebtedness of the US economy, which is currently around 845.000 USD per family, could eventually lead to a massive devaluation of the USD:
Anyone who believes that the debt of the United States with economic growth, new debt, or printing more USD can be solved, is an idiot.
Cryptocurrencies vs. Gold
Since 2009, Bitcoin, the dominant cryptocurrency, is referred to as Gold 2.0 or a better version of the traditional asset. The precious metal because of its fungibility and transportability is criticized for decades. However, gold is a system which people trust for millennia.
In contrast, cryptocurrencies such as bitcoin and ether are divisible, can be easily traded and are transportable. In fact, cryptocurrencies have all the properties for a store of value. Only the confidence that has been built up in gold over millennia is missing.