Bitcoin, Monetary Expansion, and “Safe Havens”

What the Internet did for speech, Bitcoin will do for money…¹

The above saying belies the fact that Bitcoin is also speech. The first Bitcoin transaction ever mined, broadcast at the height of the Great Financial Crisis, captures a powerful headline:

“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”²

Today, this message is secured by tens of thousands of computers comprising Bitcoin’s global network. Satoshi timestamped a critical moment at the start of a global monetary expansion often known as quantitative easing. Following the 2008 Great Financial Crisis, central banks around the world were in a dire position. Traditionally in times of trouble, central banks can lower interest rates to stimulate economic spending. However, even after cutting rates to zero or negative in 2008, the financial crisis would not abate.

Update: The U.S. has since dropped to near-zero

So the central banks of the world turned to another monetary experiment of last resort. In the words of the Bank of England, “There’s a limit to how low interest rates can go. So when we needed to act to boost the economy, we turned to another method of doing so: we introduced quantitative easing.”³ Known by or closely associated with terms such as bailouts, QE, money printing, or balance sheet expansion, this is the practice of central banks buying…