Digital currency came in with a bang and changed how we valued money and the people dealing with it. It has definitely offered us more security than real money has ever offered, along with many other benefits like global coordination without much in between.
For years, inflation has been on the lower scale,and people have been fine with saving their assets in currencies that are more powerful,the US dollar being one of those. Now, the world has moved onto a new way of storing value, which is in the form of cryptocurrency. Bitcoins are the new strong currency of the developed world.
Why the shift?
One of the biggest questions that come to mind upon thinking about bitcoins is that, how did one aspect change everything so quickly? How could we so easily move to a new aspect that is still unknown to us in so many ways?
The answer to this question is that the global financial system has changed.Central banks are now the biggest buyers of sovereign debt issuances. The same banks were trusted with maintaining moderate inflation,but that changed when there was so much sovereign debt in circulation.
Investors have said that this is an unsustainable situation and a hint on the upcoming financial crisis,which will break the back of the market. Also, central banks have been under a lot of political pressure which has led to decisions that haven’t proven to be fruitful for various countries.
This is not the scenario of just one country, rather we will be facing a global financial crisis and what we need in such a situation is a currency which is stable and not affected by the regular laws of economics. This is why everyone is looking towards how and where to buy bitcoins, which is a safer way of storing value.
The warning bells
Knowing that a financial crisis is over our heads is no new news. This has been in the eyes of investors and traders since the time,more and more money was being printed globally. People now know the story clearly,which has been playing for the last ten years, that the purchasing power will decrease and people will eventually start buying something like bitcoins.
A lot of people are still not convinced that the right way to invest and get good value of money in bitcoins. One of the major reason for this is the old mentality of investors and traders. Most of them are still betting on the US dollar being the one that will save them.
Experts have also suggested gold as one of the ways in which good value for money can be received. The level of output can only be expanded with something like bitcoins, most probably them only. They are the hedge we know of as of now,and it is on all the traditional investors to realize that soon.
A lot will play differently in future and to determine which asset will play better in an environment that is ever-changing is hard. This is why we have to move onto a more stable asset which is not governed by the usual policies.Hence, Bitcoins are the reflationary hedge we are looking for.