Analyst Willy Woo addressed a 2019 challenge from economist Saifedean Ammous regarding the economic impact of a hard-capped currency. Woo suggests that Bitcoin’s fixed supply could hinder economic growth by increasing borrowing risks. As the value of such currency rises, borrowers face higher repayment costs, which may lead to increased default risks and reduced lending activity.
Woo highlights the current global investment in AI infrastructure as an example of debt-fueled expansion. He notes that under the historical gold standard, the ratio of paper money to gold backing was increased to mitigate lending risks and maintain credit flow. He suggests that a Bitcoin-based economy might experience slower growth but potentially fewer market bubbles.
The analyst argues that economic growth depends on large-scale infrastructure for technology, energy, and raw materials, which requires significant capital pools. He has previously proposed that Bitcoin may follow a 6-8 year debt cycle. This debate reflects the ongoing divide between proponents of hard money and critics who view fixed supply as a constraint on credit.
