If you were in an area where the national currency was going down the toilet, what would you do?
In the past, people in this situation opted to enter gold or a commodity like that. Today, Bitcoin is the asset of choice for people in this situation.
The situation in Turkey is rapidly declining. The Turkish Lira is down 45% on the year against the USD. This is a trend that is expected to continue. The Turkish people responded by piling into Bitcoin.
One of the reasons for this is the clear stance the Turkish government has regarding Bitcoin. In that country, it is legal to purchase, hassle free, through local banks. This is an opportunity the populous is taking advantage of.
So while the government is engaged in a back and forth with President Trump, the population of Turkey is going Bitcoin.
Venezuela also is having issues with the United States President. Under orders of sanctions, the Venezuelan government decided to turn to cryptocurrency as the answer. This drew complains by the President that the Venezuelans were simply issuing that currency to avoid sanctions.
Wouldn't you if you were them?
The Petro is their solution and it is backed by oil reserves. Recently, it was announced this would replace the Bolivar as the national currency.
South Africa, Iran, and Russia are also seeing their fiat currency obliterated. The later two, like Venezuela, are also under sanctions from the United States. This is putting enormous pressure on those national currencies. South Africa, while not in the same boat, is feeling the effects of a global trade war.
The question is how long until these two nations adopt cryptocurrency as a way around the United States actions?
We keep hearing from the mainstream media how well the global economy is doing. While this might be the case, there are a number of countries who are not experiencing this. Since fiat is backed by nothing but confidence, when it falls, the currency becomes worthless. Economies that are collapsing, for whatever reason, tend not to draw outside investment. This creates a snowball effect putting more downward pressure on the national currency.
Cryptocurrency is a nationless, borderless asset class. Bitcoin is a monetary unit that is tied to no national entity. The backing is based upon the belief in the blockchain as opposed to any one particular government. Sanctions are useless against this asset since it operates on computers all over the world.
One major section of the early adopters of Bitcoin are those who do it out of necessity. As more countries find their economies in jeopardy, hence their currencies being devalued, the more people will turn to cryptocurrency. The advantage that Bitcoin, as an example, has over gold is that the returns are far superior. Also, if one is in a situation where physical escape is needed, Bitcoin is a lot easier to transport than gold.
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