Warren Buffet Warns of Inflation. Is this Good/Bad for Crypto? A closer look at the US real-estate market, recent worries about an inflationary USD, and how it may (or may not) affect crypto prices over the next few months.
tl;dr Usually crypto prices and real estate prices are correlated, but the last few months less so based on the author's analysis of a chart.
Generally, real estate has been inflation-proof, but sometimes housing markets in cities can be so overheated that it is too expensive for renters, causing them to move. This may cause a drop in prices. It is not made clear whether inflation directly causes these rental housing price increases that drive citizen flight or whether it is a metaphor.
The author concludes that if we consider crypto to be virtual real estate, which becomes more expensive due to limited supply, these factors may drive prices too high to be accessible, causing lower marketplace participation.
One concern I have with this theory is it is driven by scarcity in the real estate renter's market, which is caused by supply being discrete. This is not the case with crypto, which can be fractionalized, giving accessibility to all at any price. An investor with one satoshi can not only participate but gains the same investment value as someone who owns 1,000 BTC. Also, the author doesn't cite any data.
tl;dr Usually crypto prices and real estate prices are correlated, but the last few months less so based on the author's analysis of a chart.
Generally, real estate has been inflation-proof, but sometimes housing markets in cities can be so overheated that it is too expensive for renters, causing them to move. This may cause a drop in prices. It is not made clear whether inflation directly causes these rental housing price increases that drive citizen flight or whether it is a metaphor.
The author concludes that if we consider crypto to be virtual real estate, which becomes more expensive due to limited supply, these factors may drive prices too high to be accessible, causing lower marketplace participation.
One concern I have with this theory is it is driven by scarcity in the real estate renter's market, which is caused by supply being discrete. This is not the case with crypto, which can be fractionalized, giving accessibility to all at any price. An investor with one satoshi can not only participate but gains the same investment value as someone who owns 1,000 BTC. Also, the author doesn't cite any data.