We only ever see coverage of the cryptocurrency meltdown on the front pages of specialized publications, as well as in generalist publications. Except that none of them has the courage to call for a complete liquidation of these assets till that time. Given the difficulties that cryptocurrencies, these new stores of value, represent, getting to this point requires more bravery. Even the economic aces that congregated in Davos for the 2022 edition understood their worth. Otherwise, the inflation-weakened current situation can make people ponder the future of bitcoin and other cryptocurrencies. Due to the fact that a large number of “enthusiasts” think the crypto market crisis would undoubtedly affect their course in the upcoming years.
It’s a nasty world. It was recently rocked by the Covid-19 problem, and now it is experiencing a number of other issues, the effects of which are undermining both the rulers and the governed. Today, the term “hyperinflation” is often used.
The numbers presented by experts may surprise some people. For example, the IMF provides advances of up to 9% for developing nations. Inflation is rising by a 3-digit percentage for struggling nations like Lebanon: 211 percent.
The insensitive wouldn’t be impacted, theoretically. In reality, households are in a panic due to the high cost of energy and commodities. to the extent that it leads to street raids, as Ecuadorians now do.
We blame Putin’s conflict with Ukraine for the start of these disasters. Unfortunately, the price of fossil fuels, which we are currently fighting to eliminate, is affected by this conflict. However, other experts put up a theory that China would have engaged in a trade conflict with the United States. According to a Cointribune staffer, the central banks serve no use. The FED is making every effort to stop the hemorrhage.
A preliminary evaluation shows that more than 50 nations experience inflation rates more than 10% annually.
The situation also has more to come. The cost is covered with cryptocurrencies. Their favored currency, Bitcoin, lost 70% of its value in just 18 months. And that gives skeptics a strong argument. Every day brings someone or some entity speaking poorly about cryptocurrency. As though they deliberately only observe falls in our universe. The stock market, however, is also down. Have they lost sight of the Nasdaq’s historic 5% decline in early May?
What is bitcoin’s response to inflation?
Bitcoin, which is currently little understood, is the joy of households desperate for postage from reliable third parties. It is a utopia in the eyes of those who have long endured the hefty fees connected with sending and receiving money in cross-border transactions. They are excused from paying additional money in such cases thanks to its peer-to-peer system.
With the exception of hodlers, investors who view bitcoin as a type of value store in the world of cryptocurrencies. Due to its resilience to inflation, this grants it a status akin to that of gold, which is regarded as a safe haven. Except that some investors, including billionaires like Paul Tudor Jones, Bill Gates, and Stanley Druckenmiller, and fund managers, are starting to turn away from gold in favor of bitcoin.
According to reports, $10 billion was just removed from gold funds. What demonstrates why they consider bitcoin to be a store of value. Furthermore, Satoshi’s cryptocurrency, which has a market valuation of over $700 billion and a 20 percent market share among stores of value, poses a major threat to gold.
Undoubtedly, bitcoin is a highly unstable asset. It has endured historic dips as it is now, despite being able to achieve an unprecedented high of $69,000.
Therefore, Bitcoin must reach a specific level of maturity before becoming a store of wealth. or widespread recognition of such. Over time, though, investors who aren’t as motivated by the spirit of speculating will be proven right. This happened with the Internet boom at the start of the century, wasn’t it?
Once it is implemented, expect a significant rebirth. The scenario will alter once institutional investors and targeted funds enter the picture.
