Austrian school meets Bitcoin

Basics of the Austrian school

In general, the Austrian school is a very holistic discipline. Thus, its representatives are often very interdisciplinary and do not deal exclusively with economics. This is very much in line with one of the central doctrines, praxeology. This discipline, which was practically founded by Ludwig von Mises, tries to explain the actions of people with fundamental laws that are valid everywhere. From these laws it is possible to deduce people’s motivation and corresponding actions in more complicated matters.

The Austrian school and money

A major difference between the classical schools of economics such as the Chicago School and Keynesianism is how the monetary system is described. Our current system of central banks is taken for granted by both. Murray Rothbard wrote his book “What Has Government Done to Our Money? “. Through the monopolization of the monetary system by the state, it is possible to increase the money supply at will, especially in a fiat money system like the one we currently have. Through the Cantillon effect, this expansion of the money supply benefits the banks and the state, but not the broad mass of the population. Thus, the main beneficiaries of the current central bank policy are those who have many shares, and of course the state and its debt policy.

Austrian School meets Bitcoin

Mark Valek became interested in Bitcoin very early on. What makes Bitcoin so interesting for representatives of the Austrian school is the fact that it is structured like gold, electronic gold. Like gold, it cannot be infinitely inflated. That is why it behaves similarly. After the interest in Bitcoin was awakened for Mark, the subject of cryptography also found a firm place in the annual In Gold We Trust Report. Just like gold, Bitcoin has some criteria that money must have from the Austrian school’s point of view. Therefore, Mark Valek sees also so much Potential in Bitcoin and Crypto generally. There would even be the possibility of a Bitcoin standard. For the time being we use the positive characteristics of Bitcoin and gold in one of our investment funds. The “INCREMENTUM DIGITAL & PHYSICAL GOLD FUND” uses the volatility of Bitcoin and the stability of Gold for maximum performance. We at Incrementum are big supporters of Gold and Bitcoin!

Finding the Balance

Like other investment options, Bitcoin is subject to boom and bust cycles. Thus, one would be well its Portfolio to the present circumstances to adapt. If one holds for example Bitcoin and gold, one should adapt its Portfolio the present achievements of the two. If the achievement of Bitcoin is larger than of gold one should make a weighting toward Bitcoin. Then one snaps the profit and makes again a restructuring and adapts to the circumstances again.

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Source: https://youtu.be/7CJM85EUjNE