The Long-Term Value of Fiat

On a recent Reddit AMA, Financier Ray Dalio cast doubt on the USD's long-term prospects as a store of value. According to Dalio, who heads up mega hedge fund Bridgewater Associates, the strong dollar is a reflection of the sudden demand on the part of investors current instability. But, as he points, eventually these investors will want to sell off, due to zero and effectively negative interest rates, and the USD will be further eroded by the the massive amounts of money being pumped into the economy.

Dalio went so far as to say that cash  "will not be the safest asset to hold."

What This Means for Crypto

If negative interest rates become the norm in order to keep the financial system chugging along on life support, there will be an even greater interest in crypto. Traders and investors will be fleeing an anemic stock market and poor countries will come to embrace crypto as a solution to devalued currencies. Countries who are looking to dethrone the dollar as the world's reserve currency will seize on this devaluation in order shift their reserves to crypto

Adoption

To me this is one of the greatest problems crypto faces. It has proven itself as a store of value, and I think the post-COVID financial crisis will only serve to cement this. However, I am optimistic that developing countries will lead the way, as they often do when it comes to innovation in payment methods. 

Conclusion

There is a lot of hype about all of the increased liquidity causing hyperinflation, and that has rightly been dismissed. However, in my opinion, that does not mean that all of this injection of money into the global economy will not have serious negative repercussions. On the contrary, it will be accelerate the decline of the USD and Fiat in general.