One of the first questions that someone who has just started using Bitcoin would probably ask is, who dictates the value of the currency? Well, there are a wide variety of factors that play quite an important role in whether the value of Bitcoin raises and whether more people start using the cryptocurrency for their everyday needs.
Today, we’ll discuss about whether a weak economy in a certain country would actually have any influence on the coin. As in the last couple of months, the US has had quite a lot of economic problems, the question would be, if a weak U.S. economy or a certain decrease in the value of the dollar would actually prove to be beneficial to the coin for a certain period of time?
Well, according to some analysts, the answer would be definitely yes! As the value of a law governed currency decreases, people who hold large amounts of money in that currency begin to wonder whether it would be wise consider moving to another one, as an effort to keep stored funds safe. Well, out of this percentage of people who decide to make the change, many may actually be driven into alternative investments like cryptocurrencies, so obviously, into Bitcoin at the moment.
To put things better into perspective, people have always considered commodities such as gold, diamonds, silver or fine art as reserves that are safe regardless of the current state of the economy of a country. The same concept could also be applied to Bitcoin in the case of another economic crisis that would require people to drop the dollar and actually invest in a currency that is more valuable, but also has the chances to increase later down the road.
With this in mind, can the idea of mass adoption really be consider a possibility in the case that the hoarding mentality that people from all around the world have is not engaged? Based on everything that has been outlined so far, the actual value of the coin is dictated by the people, as there’s no major enterprise that has the possibility to do so. Although what happens next cannot be predicted, there are certain speculative ideas that will grant people an idea of how to influence the coin. The richer the party gets and the more people purchase and utilize the cryptocurrency, the more its value will increase.
However, not only the U.S. economy has the possibility to change the evolution of the coin. In the case that the Euro falls for example, most of the people in Europe who hold important sums of money in the currency will begin looking for alternatives, one of which is Bitcoin. Before that happens, as a family of users, we have the responsibility to encourage more and more people to use the coin and make as many payments with it as possible, as this will make it a viable option in the case that the economy of any country or falls and the value of a currency decreases.
What do you personally think about this? Does the economy of a country play a major influence on how many people adopt Bitcoin? Let us know your thoughts in the comment section below.
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