Brazil printed 30% of all the money that exists in the country in 2020, while Bitcoin reduced emissions by half

Youtuber uses disorderly printing of fiduciary currency to explain how the price of Bitcoin values in an „organic“ way.

The Brazilian Real and the Bitcoin (BTC) draw opposing paths in the financial market, with respect to the issuance of new coins in circulation. While Bitcoin decreases its issuance every four years with halving, for example, the Brazilian Real can be printed infinitely, at any time.

Central Bank officially launches R$ 200 bill and stresses that demand for physical money has increased

Thus, in the last twelve months around ⅓ of all the Brazilian Real that is currently in circulation in the market were produced. On the other hand, the emission of Ethereum Code scam through mining was reduced by half in May 2020.

Thus, the Bitcoin emission can be used to explain the organic valorization of cryptomoeda in the market in face of the Brazilian Real, according to a Twitter publication of the profile owner of the Bitcoinheiros channel on Youtube.

Brazilian Real emission

The financial market witnessed a disorderly issuance of fiduciary currencies in several countries in 2020, including Brazil and the United States. With the spread of the pandemic affecting the economy around the world, the issuance of money was used as an economic stimulus by some countries.

Real is the world’s worst currency with nearly 40% devaluation against the dollar

Thus, in Brazil alone there are more than R$ 621 billion in fiduciary currency circulating in the country today. As the graph below shows, in the last twelve months there has been an increase of almost R$ 200 billion in cash issuance.

Brazilian Real issue (Reproduction/TradingEconomics)

According to Bit Dov, the issue of money in Brazil has been intensified in the last twelve years, where 65% of all Brazilian real was produced. Youtuber highlights that this production increased even more in 2020, a year that corresponds to almost 50% of all paper money issued in the country since 2008.

„In 27 years of Brazilian Real (BRL) production, 30% of all BRL in circulation were produced in the last twelve months, 65% (was produced) during the last twelve years“.

Organic valorization of Bitcoin

The broadcast of the Brazilian Real was quoted by the owner of the Bitcoinheiros channel on Twitter in a comparison with the production of Bitcoin through mining. With a limited emission of 21 million units, the price of BTC tends to increase with each halving.

Central Bank wants to issue Digital Currency of the Real to ‚make life easier‘ for the tourist and not to end up with physical money

On the other hand, fiduciary currencies, such as the Brazilian real, can face a great devaluation in the market with a rampant issuance. With the creation of the R$ 200 note recently, and the addition of more than R$ 200 billion in circulation in the market, the M1 Monetary Aggregate (paper money held by the public + cash deposits) had a growth of approximately 90% in 2020.

By using the limited issue of Bitcoin to explain the valuation of cryptomime in recent years, youtuber says that the large volume of paper money production was a worldwide trend.

„This trend can be observed in almost every currency in the world. And there are still people who don’t understand why Bitcoin values organically“.

At the same time that R$ 200 billion in paper money were produced in Brazil, the reward in the Bitcoin mining activity was reduced by half, with the halving that happened in May 2020.

Unlike the Brazilian real that continues to be produced by the federal government, Bitcoin tends to be more scarce with each halving, which causes an „organic valorization“ and cyclical for cryptomeda in the market.