Germany, the factory of Europe, is slowly shutting down: what does this mean for bitcoin?

Germany is also known as the factory and engine of the Eurozone. Although China rules the world, no one in Europe can even match Germany's figures. In this sense, it is important that our eastern neighbour's industry keeps running well, otherwise Europe could well be in bigger trouble.

Germany de-industrialising

If the words of German macro analyst Holger Zschaepitz are to be believed, Germany has been in a process of de-industrialisation since 2007. The level of industrial production has remained flat since then, while the German economy has grown by 17 per cent from then on.

https://twitter.com/Schuldensuehner/status/1589519853492150272

A split that Holger Zschaepitz says indicates that Germany is currently de-industrialising. For the month of September, however, industrial production was allowed to record growth of 0.6 per cent, after losing 1.2 per cent in August.

As a result of that increase, output in the third quarter of 2022 was roughly the same as in the second quarter. So in the short term, there seems little to worry about, but in the long term, this is a worrying development for both Germany and the Eurozone.

What does this mean for bitcoin?

In principle, initially this does not mean much for bitcoin. In the long run, however, it may show its effects. If German industry weakens, this is a bad development for the euro. After all, Germany is largely footing the bill in the Eurozone and if its ability to do so falls away, it could well weaken the euro further.

The further weakening of the euro is causing people to look for alternatives to hold their wealth. In that respect, bitcoin's absolute scarcity could be an attractive endpoint. Although we are currently seeing a flight to US dollars in particular.

In the longer term, the US central bank also seems vulnerable, due to its sky-high US government debt, and the dollar is not safe either. Slowly but surely, this will start the transition to hard assets, of which bitcoin will hopefully be an important part in the coming years.
https://www.indexuniverse.eu/germany-the-factory-of-europe-is-slowly-shutting-down-what-does-this-mean-for-bitcoin/