btc: Bitcoin as a solution for inflation. Will Argentina adopt Cryptocurrencies like El Salvador?

btc: Bitcoin as a solution for inflation. Will Argentina adopt Cryptocurrencies like El Salvador?

< Show Wisdom Collection: Bitcoin as a solution for inflation. Will Argentina adopt Cryptocurrencies like El Salvador?article avatarBankole Oluwamayowa

Web developer

Can Bitcoin be the solution for inflation? Why?

Absolutely yes. I usually define bitcoin as a social network for smart people who like financial freedom. As such, any country that wants to be financially and economically free should embrace bitcoin. Inflation is an inevitable enemy allcountry will surely encounter, because of the diverse reason that leads to that. Among theses reasons are unemployment, importing more than exporting, deflation of fiat among other reason. If a country therefore embraces bitcoin, its annual transactional fees or charges in foreign exchange will automatically disappear which will help more circulation of fund. Besides, Bitcoin is structured technologically to encourage a deflationary attitude and a relatively stable store of value. Just like the role gold plated in the economy of most countries around the globe in the 20th century.

How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?

Well, everyone around the cryptospace knows quite well that the price of BTC determines the major rise and fall in prices of the alts. Historically, BTC has experience surge in price more and more over time as a result of acceptability. As such, the more BTC is widely accepted, the more it's price surges which will in turn leave a foot print on the alts. In summary, BTC as a legal tender across all countries will enhance swift international transactions and as well leads to surge in prices of all other cryptocurrencies. So it's "a win win game"

article avatarHabibu Abdullahi

Developer Associate

Can Bitcoin be the solution for inflation? Why?

The short answer is Yes! Now the long one, in the case of Argentina and Latin America in general Bitcoin might help but from my experience of 6 years living in Brasil, the political and economic system are the major challenge.

How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?

It will bring mass adoption, which will hugely make the crypto market more valuable. Actually, I am very optimistic about the upcoming El Salvador BTC legal tender adoption

article avatarMirb .

Investment Specialist,Crypto Currency Specialist,Analyst

Can Bitcoin be the solution for inflation? Why?

Some financial experts believe that BTC does not have a long enough history to determine that, but I think that it is necessary to take a smart risk, because based on the overall situation, it could be one of the safer solutions. By July 28, about 18.77 million bitcoins had been mined, there were only 2.23 million left to put into circulation and this is one of the main reasons for BTC to be a haven from inflation.

How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?

A lot of crypto projects were naturally tied to Bitcoin, and BTC has had an unstable path through history. Bitcoin as a legal tender turns on very quickly the accelerated stability and maturation of many crypto projects.

article avatarSergey Arefev

Director

Can Bitcoin be the solution for inflation? Why?

Of course, btc can be seen as a remedy for inflation. After all, its final amount is known and over time, after the end of the extraction of the last btc, they will begin to become less and less and therefore it will only become more expensive!!!

How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?

Naturally, with the time of increasing recognition of btc as a legal tender, it will only grow as the demand for it will grow accordingly. And then there's a bunch of great altcoins!!!!

article avatarJames Barcus

IT VP

Can Bitcoin be the solution for inflation? Why?

Simple logic would say yes. Simply because the value is not based on the government, or GDP of the country. It’s value will increase over time compared to their own currency which will decrease in value. This should provide an economic stability that would greatly assist growth and future prosperity.

How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?

The value of Bitcoin would continue to rise and become more stable. Crypto in general is a global economy where the whole world can help to determine its value. This can bring stability to many countries that need it. I also believe that it will aid in reducing corruption and economic dictatorships many governments use for control. It may actually give greater control to those who have large holdings in BTC which may prove to be as bad.

article avatarHenry Bill

Trader

Can Bitcoin be the solution for inflation? Why?

Yes, Bitcoin sure. It's one solution for inflation. The most current circulating coins are issued and controlled exclusively by the government. And when the government manages the finances and manages the economy in a weak way, inflation will become more and more serious. The traditional currency depreciated because of printing too much out of control. BTC has a small and limited total circulation. And BTC is divided among many private institutions around the world to hold. That makes BTC valuable and inflation-free. There is only one small problem that the cost of BTC mining is increasing day by day. And the fee per transaction also increases as they become scarce. that's not good if BTC wants to become the universal currency. But Currently there are many other alternatives. Those are the Altcoins. The question now is whether altcoins are strong enough to become a popular and accepted currency in many countries. it's a fierce competition. Thank, It's my idea

How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?

a good question. Everyone know about BTC, but Not everyone knows ETH, BNB, LTC, XRP or any altcoin. BTC has a very important role in the world of cryptocurrencies. Maybe BTC like as gold of cryptocurrencies. So Bitcoin as a legal tender, it will be a huge boost for the crypto market. I believe it

article avatarDavid Filip

Product Manager

Can Bitcoin be the solution for inflation? Why?

Yes, for sure. The main advantage of the decentralized currencies is that it cannot be ruled and influenced by the national banks or states. It is clever way how to avoid the quantitave easing of national currencies. On the contrary you are unable to influence national economy via monetary policy. The potential of BTC is especially true with the more authoritarian states. It can help fight poverty, help unbanked and more. It is an option how to enter international trade and it will help to balance basic income across whole world. It will balance prices also. From the economical standpoint it is the true meaning of laissez faire.

How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?

This will be helpful for other projects to get the recognition. There will be more use cases for other more smart contract oriented coins such as ETH and its competitors. I think that there is a room for growth of multiple platforms which will push for competition and in the end innovation. There can be a situation where we can have more legal tenders than BTC.

article avatarHasan Tolaema

chief executive officer

Can Bitcoin be the solution for inflation? Why?

If the world uses Bitcoin, there will be no more QE, and if so, many Superpowers will go bankrupt (in the subprime, if the US doesn't QE, the US is bankrupt by now, Japan and the Euro as well). The whole world uses Bitcoin like gold. no hard money No currency intervention, no Forex market to trade. We fly to Japan and use Bitcoin to buy ramen just like in Thailand using Bitcoin to buy boat noodles.

How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?

When it was introduced to the world over a decade ago, Bitcoin was supposed to be a revolution in the finance ecosystem. But that revolution has hardly come to pass. The cryptocurrency’s tumultuous first decade has been marked by scandals, missteps, and wild price swings. After achieving a record high price of more than $63,000 in April 2021, BTC has fallen by 24% to nearly $48,000 as of August 30, 2021.1 But investors and the cryptocurrency’s enthusiasts have doubled down on their optimism regarding its future. As such, the coming decade could prove to be pivotal to Bitcoin and cryptocurrencies more broadly.

article avatarVision N

Full Stack Developer / Crypto / Blockchain

Can Bitcoin be the solution for inflation? Why?

Yes, as a crypto enthusiast I say, Bitcoin can be the hedge against inflation due to so many reasons. Bitcoin has a limited supply of 21 million and it is not like traditional finance in which paper banknotes can be printed according to the demand. Once 21 million bitcoin is mined, there will be no additional supply of BTC and this scarcity inspires Bitcoin to be digital gold to act as a hedge against inflation.

How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?

Recognizing Bitcoin as a legal tender means it also helps to increase the use-cases of cryptocurrencies with the increased adoption. You know, Bitcoin influences the price of so many pair strengths of the crypto in the cryptocurrency markets.

article avatarDodi Pratama

Guru

Can Bitcoin be the solution for inflation? Why?

Hardcore Bitcoin enthusiasts say the digital coin is the world’s best hedge against rising consumer prices. The logic: Unlike U.S. dollars or any other normal currency, it’s designed to have a limited supply, so it can’t be devalued by a government or a central bank distributing too much of it. Almost every bull case on Bitcoin has looked prescient lately—the cryptocurrency is trading at around $57,000 a coin, up from about $5,000 a year ago—so that’s added some buzz to this inflation story. With the economic outlook perking up, Covid-19 cases falling, and greater amounts of fiscal stimulus on the horizon, investors in all kinds of assets seem to expect a bit of a rise in prices. But that’s coming from a very modest base. Over the past year, the inflation rate in the U.S. has been 1.7%. And then there’s the question of whether the digital asset would really act as an effective hedge. It doesn’t have a long enough history to establish that, says Cam Harvey, senior adviser to Research Affiliates and a professor of finance at Duke University. Theoretically, if investors come to regard it as similar to gold, Bitcoin might hold its value over a very long term—as in a century or more, Harvey says. In their research on gold, he and his colleagues have found that it has held its value well for millenniums. But they also found that it’s prone to manias and crashes over shorter periods. (Gold, notably, is down 9% this year despite all the inflation talk.) Bitcoin too has swung wildly in its short life, for reasons barely connected to anyone’s view on inflation. “What’s going to happen to Bitcoin? It’s really unclear,” Harvey says. “The price is not just driven by the money-supply rule, it’s driven by other speculative forces. That’s why it’s multiple times more volatile than the stock market.” It’s conceivable that a bout of inflation could have the opposite of the expected effect on Bitcoin. If inflation induced a recession, for example, investors might respond by stepping away from riskier assets such as cryptocurrencies. relates to Don’t Count on Bitcoin to Be a Sure-Thing Inflation Hedge Ark Investment Management’s Cathie Wood says she’s as concerned about deflationary forces as she is with inflation.PHOTOGRAPHER: ALEX FLYNN/BLOOMBERG In recent weeks, when investors concerned about inflation pushed the 10-year Treasury yield from 1.34% to as high as 1.62%, Bitcoin suffered its worst drop in months. Crypto proponents argue that Bitcoin traders long ago anticipated bond yields would rise—and a subsequent spike in yields did roughly track with a bump in crypto. Still, Bitcoin’s recent moves bear at least a passing resemblance to more straightforward speculative trades. Bitcoin has received a stamp of approval from more than a handful of notable Wall Streeters, including veteran hedge fund manager Paul Tudor Jones, who say they like it as a store of wealth. “That is certainly an element that has driven investment by institutions, particularly in the wake of the ways in which policymakers have worked to jump-start the economy” after the Covid slowdown, says Michael Sonnenshein, chief executive officer at Grayscale Investments, which runs a fund that holds Bitcoin. “Certainly we have no shortage of global macro investors for whom adding Bitcoin has acted for them as a hedge for inflation.” Bitcoin’s strongest advocates see its rising price as an early-warning sign that the traditional financial system is vulnerable, and argue that the cryptocurrency could rise further as investors look for a haven. Such arguments hinge on the idea that inflation won’t just edge up with a growing economy, but could explode as a result of so-called money printing. The Federal Reserve doesn’t change the money supply by literally printing bills. However, a measure of the amount of money in the financial system known as M2 has increased, thanks in part to accommodative policy. Fed Chairman Jerome Powell said in recent congressional testimony that the growth of the money supply no longer has important implications for the economic outlook. “We’ve had big growth of monetary aggregates at various times without inflation,” he said. “So it’s something we have to unlearn.” Jim Paulsen, chief investment strategist at the Leuthold Group, agrees. While there may be more money, its velocity—or the frequency with which money changes hands—has dropped off. That’s a crucial factor because it shows money is being saved rather than spent, which keeps price pressures muted. But even if velocity turns higher, offsetting disinflationary forces could still come into play, including an aging population and digital technology’s propensity to push prices down. “Inflation is turning up a little bit, but I don’t think that means that crypto is going to go nuts,” Paulsen says. Bitcoin is unlike most other inflation hedges. Its value is based entirely on other people’s willingness to hold it: The digital token isn’t tied to any other asset, such as oil or real estate or earnings from a business, that might naturally rise in value along with consumer prices. It’s possible that inflation could go up and it’s possible that Bitcoin could too, but the two aren’t necessarily linked. One of Bitcoin’s best-known bulls, Ark Investment Management founder Cathie Wood, said in a recent webinar that she’s as concerned about the forces of deflation—or falling prices—as she is with inflation. “The kindling wood for inflation exists,” says Marc Chandler, chief market strategist at Bannockburn Global Forex. “One has to make a judgment about whether there’s sufficient spark.” Instead of looking at Bitcoin prices as a weather vane of inflation, he prefers to look at signals such as oil prices, shipping costs, or the price of semiconductors. They’re all rising as the economy gains steam, but that doesn’t mean the dollar’s being undercut by a flood of printed money. “The high priests of the cryptocurrency space look for any reason to help their case,” he says. “I’m still hesitant to think that Bitcoin tells us anything about high-frequency economic variables.”

How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?

Price fluctuations in the bitcoin spot rate on cryptocurrency exchanges are driven by many factors. Volatility is measured in traditional markets by the Volatility Index, also known as the CBOE Volatility Index (VIX). More recently, a volatility index for bitcoin has also become available. Known as the Bitcoin Volatility Index, it aims to track the volatility of the world's leading digital currency by market cap over various periods of time.1 Bitcoin's value has been historically quite volatile. In a three-month span from October of 2017 to January of 2018, for instance, the volatility of the price of bitcoin reached to nearly 8%. This is more than twice the volatility of bitcoin in the 30-day period ending January 15, 2020.1 But why is bitcoin so volatile? Here are just a few of the many factors behind bitcoin's volatility. Bad News Hurts Adoption Rate News events that scare bitcoin users include geopolitical events and statements by governments that bitcoin is likely to be regulated. Bitcoin's early adopters included several bad actors, producing headline news stories that produced fear in investors. El Salvador made Bitcoin legal tender on June 9, 20212. It is the first country to do so. The cryptocurrency can be used for any transaction where the business can accept it. The U.S. dollar continues to be El Salvador’s primary currency. Headline-making bitcoin news over the decade or so of the cryptocurrency's existence includes the bankruptcy of Mt. Gox in early 2014 and, more recently, that of the South Korean exchange Yapian Youbit. Other news stories which shocked investors include the high-profile use of bitcoin in drug transactions via Silk Road that ended with the FBI shutdown of the marketplace in October 2013.3 All these incidents and the public panic that ensued drove the value of bitcoins versus fiat currencies down rapidly. However, bitcoin-friendly investors viewed those events as evidence that the market was maturing, driving the value of bitcoins versus the dollar markedly back up in the short period immediately following the news events. Bitcoin's Perceived Value Sways One reason why bitcoin may fluctuate against fiat currencies is the perceived store of value versus the fiat currency. Bitcoin has properties that make it similar to gold. It is governed by a design decision by the developers of the core technology to limit its production to a fixed quantity of 21 million BTC. Since that differs markedly from fiat currency, which is dynamically managed by governments who want to maintain low inflation, high employment, and satisfactory growth through investment in capital resources, as economies built with fiat currencies show signs of strength or weakness, investors may allocate more or less of their assets into bitcoin.

This is not a financial advice. Please do your own research and consider the risks of trading cryptocurrencies.

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