The countermeasures attempted by world governments to fight the COVID-19 pandemic will have disastrous consequences on the economy, said Tim Draper. The prominent VC investor outlined that amid this, Bitcoin will flourish as people will utilize its decentralized nature.
Simply Printing Money Doesn’t Work
The sudden outbreak of the coronavirus pushed world leaders to take drastic measures to fights the spread. Entire countries initiated full lockdowns, businesses closed down, the economies dwindled, and governments had to respond. Some announced stimulus packages to support their economies, and the U.S. topped them all with a historic injection totaling at $6.2 trillion.
Many world-renowned experts criticized this particular measure. American venture capital investor, Tim Draper, also joined the “you can’t just print so much money at once” initiative. In a recent interview, the Draper Associates founder bashed his own government:
“The governments are printing super amounts of money, and they are saying, “we’re here – trillion dollars.” The government can’t put a trillion dollars out in the economy unless they just do a tax holiday. They have to do it through the SPA and through different organizations. It creates all sorts of friction to getting the money. It will be years before that money permeates the economy.”
As such, Draper believes that the value of the dollar will eventually decrease. As a long-time Bitcoin supporter, he noted that this could be its moment:
“This is going to be a really interesting time. People will say, “wait, why don’t I use Bitcoin? I know there are only 21m of them, and we don’t have to worry if the governments are diluting their currencies by printing tons of them. We can; instead, all use a currency that we all agree on, and it’s all a part of the economy. It’s already frictionless, open, transparent, and global. So why bother with the other ones?”
According to Draper, once the COVID-19 crisis is over, people will analyze the actions of their respective governments. And if they decide those measures were “too draconian” and leaders had too much power, this could turn them to Bitcoin even more because of its decentralized nature.
He also added that smart contracts would have a significant role in the post-coronavirus world. People would want more transparency, control, and knowledge about what is happening.
A Blessing In Disguise
The number of jobless citizens is skyrocketing during the nation-wide lockdowns. Draper believes, however, that desperation will exhort people to take “lives into their own hands.”
Instead of listening to governments and media, they might decide to act, educate themselves, or even become entrepreneurs. And if they manage to view the current situation as an opportunity, the world might emerge a better place than it was before it all started:
“This tends to be a very good time for innovation. The world is going through a rethinking. This is the kind of time where all of these things that seemed possible but maybe unlikely, are now on the table. People are starting to say: “wait, how do we use Bitcoin? How do we use smart contracts? How do we use artificial intelligence?”