We Study Billionaires - The Investor’s Podcast Network BTC200: Base Fiat Money and Bitcoin w/ Matthew Mežinskis (Bitcoin Podcast)
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Sep 18, 2024 Matthew Mežinskis, a seasoned expert in base money trends and Bitcoin, shares his six years of research on the interplay of inflation and deflation. He discusses why central banks are under more scrutiny than ever and draws historical parallels to Kublai Khan. Mežinskis argues that CBDCs are mere imitations of Bitcoin's success and highlights Bitcoin's impressive growth relative to traditional assets. He also examines how population growth influences monetary trends and what Bitcoin adoption could mean for the global economy.
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Base Money Definition
- Base money is the liability side of a central bank's balance sheet, composed of physical currency and bank reserves.
- Bank reserves act as a form of fiat gold, facilitating interbank transactions via systems like Fedwire.
Cash vs. Reserves
- The ratio of physical cash to bank reserves has inverted since the 2008 financial crisis, from 80/20 to roughly 30/70.
- Both cash and bank reserves are analogous to Bitcoin due to their real-time gross settlement (RTGS) nature.
M0 vs. Gold and Bitcoin
- Global M0, or base money, totals around $9 trillion, comparable to the gold market cap.
- Bitcoin's market cap has surpassed that of the fifth-largest currency, the British pound sterling.