Kim Dotcom, the German-Finnish entrepreneur and the creator of Mega, has publicly stated that gold and crypto are better long-term investments than the US dollar.
In a recent statement, Dotcom said:
“Trust me. Buy crypto and gold. Your USD will become worthless. With US economic collapse all old money currencies will crash. Times will get tough. But you’ll be fine if you hedge some of your assets in preparation for the crash. The big crash is coming 100%.”
Value of the US Dollar
The value of cash and any other form of money depends on their ability to operate as a medium of exchange. If the US dollar, for instance, can be used to purchase properties and services, it has monetary value.
As former Goldman Sachs CEO Lloyd Blankfein stated, fiat money like the US dollar is valuable because under the control of central authorities, people are forced to use cash as the main method of payment. In a way, the value of fiat money is directly attributable to the control a state has over its financial system, and a decline in authority could lead the value of the currency to drop substantially.
Most recently, the lira, the national currency of Turkey, experienced a 50 percent drop in its price against the US dollar triggered by the imposition of tariffs on the Turkish economy by the US government.
To prevent the devaluation of the lira, financial authorities of Turkey immediately implemented strict capital controls to prevent its currency leaving the region and being liquidated for other foreign reserve currencies.
For a major economy like the US, such a drastic situation may never occur. However, Dotcom emphasized that the increasing debt of the US economy, which currently hovers at around $845,000 per family, could lead to a massive devaluation of the US dollar in the long-term.
“The average total debt per family in the US is now at 845000 USD. The average unfunded liability in the US is now at 938000 USD per taxpayer. Anyone who thinks US debt can be solved with economic growth, new debt or printing more dollars is an idiot. US Empire will default,” Dotcom said, citing the statement of Russia’s Finance Minister.
Earlier this year, Anton Germanovich Siluanov, the Minister of Finance of Russia, said that the government significantly reduced its investment in US assets, as it has become a risky tool for payments.
Crypto Versus Gold
Since its creation in 2009, Bitcoin, the most dominant cryptocurrency in the global market, has been described as gold 2.0, or a better version of the traditional asset.
For decades, due to the physical characteris of gold and the ability of central authorities to confiscate the holdings of people stored in the precious metal, experts have criticized the fungibility and transportability of the asset.
In contrast, cryptocurrencies like Bitcoin and Ether, the native cryptocurrency of Ethereum, are liquid, easily interchangeable, and transportable, and possess all of the characters that allow it to function as a better store of value and a medium of exchange than gold.