Historical market drawdowns have often preceded significant shifts in US monetary policy, leading some to speculate whether cryptocurrencies could become the new standard in the post-2024 era. Looking back at history, we can see a pattern of drawdowns in both stocks and bonds that have resulted in major policy changes.

One notable example is the market crash of 1931, which saw a 40% drawdown in stocks and a 7% drawdown in bonds. Two years later, President Franklin Roosevelt implemented Executive Order 6102, which prohibited private ownership of gold. While this action was not a direct financial rescue by the Federal Reserve, it aimed to increase the government’s gold reserves and stimulate economic activity during the Great Depression.

Interestingly, this event shares similarities with Bitcoin’s mining difficulty adjustment mechanism, which occurs every 2,016 blocks. Both mechanisms are designed to stabilize their respective systems during times of economic stress.

In 1969, the markets again experienced drawdowns in both bonds and stocks, this time around 5%. Two years later, President Richard Nixon decoupled the US from the gold standard, marking the beginning of the fiat standard era.

Based on this recurring pattern of market drawdowns followed by significant policy changes, it is possible that we are on the verge of another major transformation in the financial landscape as we approach 2024. Could this be the era of dominance for digital currencies?