Business cycles in the time of Bitcoin


Is there a crypto bubble?’ This, and variations thereof, was one of the most common headlines in 2017 and even today. When you hear the words ‘crypto’ and ‘bubble,’ you might not think there’s something fundamentally either‐or between them. Yet the only reason an unsustainable bubble could emerge is through the inflation of fiat, which cryptocurrencies may eventually supplant.

The principle of price increases being tied to increases in money supply is most associated with Milton Friedman, yet monetary manipulation has long been recognized as significant to people’s spending behaviors, from Copernicus and the 16th‐century School of Salamanca onwards.

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