Bitcoin Maximalism Will Rise Over Time, Predicts Balaji

Balaji Srinivasan – the famous venture capitalist and former chief technology officer (CTO) of Coinbase – believes that the maximization of Bitcoin is set to gain strength as a philosophical and economic belief system.

In a Twitter post on Wednesday, the businessman argued why trust in the current financial system could erode over time as US dollar inflation pushes a new generation to Bitcoin.

Unstoppable inflation

According to the US Bureau of Labor Statistics, the twelve-month consumer inflation rate in the US rose to 3.5% in March, having now remained well above the country's 2% target for three years in a row.

While the Fed has raised interest rates significantly to combat rising prices, Balaji claims that this method brings harsh side effects on consumers – such as higher interest payments on loans and cars.

“There's nothing they can really do,” Ballage wrote. “High interest rates mean that the system is accumulating interest costs in an unsustainable way, so it cannot keep interest rates high forever.”

Federal Reserve data shows that personal interest payments in the United States rose from $240 billion in 2021 to $520 billion today.

Meanwhile, Bank of America research shows that US Treasury interest payments have risen to $1.1 trillion annually, and are expected to reach $1.6 trillion by the fourth quarter of 2024 if interest rates remain stable. If the Fed decides to cut interest rates by 150 basis points before then, these payments will still rise to $1.2 trillion.

Adding to the interest burden is the country's ongoing debt issuance through notes, bonds and bills, which has risen again to $7 trillion in the fourth quarter of 2023. US Debt ClockThe country's total debt burden has now topped $34.6 trillion after Congress voted to suspend its debt ceiling last year.

The ultimate Bitcoin revolution

Balaji believes the country's debt levels will push it to print “enormous amounts of money” – a dangerous prospect given that 64% of 18- to 29-year-olds view inflation as their most important national issue.

“This is the stuff revolutions are made of,” he said. “That's why the next showdown is really the people versus the government, the network versus the state, and most important of all – the dollar versus Bitcoin.”

“I'm not an extremist, but the Bitcoin cap will go up,” he added.

Bitcoin exaltation is a movement and belief system that holds that Bitcoin is superior to all other financial assets. This includes precious metals, fiat currencies, bonds, stocks, and even other cryptocurrencies.

Michael Saylor – CEO of MicroStrategy, the world's largest Bitcoin holder – has referred to himself as a Bitcoin proponent.