One of the fundamental pillars of the modern economy is the management of the money supply. Although this management has required different approaches throughout history, the capacity for monetary policy manipulation has reached unprecedented levels in the last century. Between 1863 and 2009, the volume of money aggregates issued in the United States was as follows:
- M1 (Physical money and liquid funds): $1.7 trillion
- M2 (Savings, funds, and other partially liquid assets): $8.5 trillion
Total money supply: $10.2 trillion. In other words, over 146 years, a total of $10.2 trillion was put into circulation in the US economic system. However, this stable system was shaken by the 2008 financial crisis, and as a result, the money supply in circulation grew at an unprecedented rate.
2009–2020: The Dramatic Increase in the Dollar Supply
In 2008, the US economy experienced one of its greatest crises. The banking system crisis and the collapse of inflated assets in the housing market forced the Federal Reserve System (FED) to take drastic measures.The most significant of these measures was quantitative easing. This means the FED injected artificial liquidity into the economy by printing more money. As a result, between 2009 and 2020:
- The M1 money supply increased by $5 trillion, reaching $6.7 trillion.
- The M2 money supply increased by $10.9 trillion, rising to $19.4 trillion.
- The total money supply reached $26.1 trillion.
This means that the money supply issued over 146 years ($10.2 trillion) was increased 2.5-fold in just 11 years. These figures show that the money in circulation has diverged from previous standards. If the volume of goods and services in the economy does not grow at this rate, a serious structural problem arises within the system itself.
Money Supply and Economic Laws
There is a fundamental rule in economics:
1 Commodity = 1 Unit of Money.
What does this mean?
- If there is 1 product in the market and 1 unit of money in circulation, the value of that product will be 1 unit of money.
- If the number of commodities in the market does not change, but the amount of money in circulation doubles, then inflation occurs.
Prices in the consumer market rise as a direct result of this mechanism.This raises a question: How does the US government combat this increasing money supply?
Managing the Money Supply: Artificial Economic Strategies
The main problem with money circulation is its unequal distribution. A certain segment of the market holds a large volume of money. Another segment needs "hot money" that can be used immediately. If the economy slows down due to this imbalance, more money must be printed to maintain circulation. But how long can this endless money printing continue? The solution is to create new economic mechanisms. One such mechanism was Bitcoin and cryptocurrencies.
Bitcoin: Digital Salvation or Artificial Value?
It is no coincidence that a system called Blockchain was created after the 2008 crisis. This system could only be accepted by the market because it was decentralized. However, the main goal was to create a tool to absorb the excess money supply in circulation, as well as to ensure a gradual, painless transition from paper money to digital money.
How does this happen?
First, Bitcoin and other cryptocurrencies were widely popularized in media across different countries. Investors began to pour money en masse into cryptocurrency instruments. As a result, in the last 14 years, the total capitalization of the cryptocurrency market has approached $4 trillion. During these years, with every major drop, the system "disappears" $200-300 billion, and it continues this periodically through artificial downturns. For example, as a result of the last three major "Crashes," more than $5 trillion has been wiped from the money in circulation.
So where does this money go?
Nowhere! Because the value is simply destroyed.
This is a system for "burning" the excess money supply—collected indirectly from people's hands—between 2009 and 2025.
Will Cryptocurrencies or Bitcoin Disappear?
I am not saying that Bitcoin will completely disappear.But I say with confidence that BTC is an artificially valued "nothingness." This process of artificial value gain could continue for 100 years, not just 10. Over time, many cryptocurrencies will disappear, while others will gain popularity. We might even see some cryptocurrencies not on the market today enter the TOP 10 after a while. Likewise, we can observe the complete disappearance of some cryptocurrencies that currently have a high market value. All these processes are a game system:
- First, artificial value is created.
- Then, that value is "broken" at certain intervals.
- Every big "bull run" results in trillions of dollars being wiped from the market.
But this erased money does not return to the real economy; it simply disappears. If you are trading, make real profits from the difference between buying and selling, take the money out, and use it in the real world. But never rely on any cryptocurrency for the long term...
Bitcoin – Artificial Value or the Currency of the Future?
Manipulation in the monetary system is one of the oldest tactics in history. Artificial mechanisms have always been created to balance the impact of excess money in circulation on the economy. Bitcoin is simply a modern variant of this system. Nevertheless, the world is gradually transitioning to digital money, and in the future, cryptocurrencies will be one of the main means of circulation.
But which cryptocurrencies exactly?…