In a social media post, veteran investor Tim Draper warned that Bitcoin could skyrocket against the U.S. dollar if the greenback faces severe inflation.
He drew a parallel with the Confederate dollar’s collapse during the American Civil War, suggesting faith in fiat money can evaporate fast. Draper argued that Bitcoin’s transparent design and ease of storage make it a stronger hedge than gold in troubled times.
Lessons from the Civil War
Draper reminded followers that the Confederate dollar began the Civil War at parity with the U.S. dollar. By the end of the conflict, it had plunged to a rate of more than ten million Confederate notes for one U.S. dollar.
He noted how public confidence vanished, and people scrambled to exchange their cash for stable currency. “Bitcoin might be worth an infinite amount of USD,” Draper wrote, underscoring how extreme inflation can render money nearly worthless.
Current Dollar Weakness
The U.S. Dollar Index has slid to its worst start in forty years. Against this backdrop, Draper warned that escalating geopolitical tensions could further erode trust in the dollar.
He sees Bitcoin as a safeguard, since its ledger is open for anyone to verify, and coins are simple to hold securely. In his view, these features make it a more reliable store of value if mainstream currencies falter.
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Why Not Gold?
Draper dismissed gold as an inferior alternative. He pointed out the challenges of storing and moving bullion and joked that you cannot buy coffee with gold coins at Starbucks.
Gold’s physical nature, he said, limits its use in everyday transactions. Bitcoin, by contrast, can be sent around the world instantly and divided into tiny units for small purchases.
Governments and Crypto Reserves
According to Draper, some nations have already begun adding Bitcoin to their strategic reserves. He believes this trend reflects official recognition of digital assets as insurance against a breakdown of the current financial system.
If hyperinflation ever grips the dollar, he said, owning enough Bitcoin could sustain individuals and families for months or even years beyond what paper money or gold could.
Bitcoin’s Price Actions
At the time of Draper’s post, Bitcoin traded around $96,647.35, up about 1.3% in the past day. Its market value stood at roughly $1.91 trillion, with daily trading volume rising more than 17%. These figures show strong investor interest even as price swings remain a feature of the crypto market.
Draper’s bold prediction serves as a reminder of Bitcoin’s appeal as a potential lifeline in times of monetary crisis. Whether or not the dollar ever faces runaway inflation on the scale of the Confederacy’s currency, his message highlights growing faith in cryptocurrencies.
As more people and institutions weigh the risks of traditional money, Bitcoin may continue to draw attention as an alternative store of wealth.
Also Read: Tim Draper Revives Bitcoin vs. Gold Debate, Says “Gold Just Sits There, Bitcoin Moves”