While, on one hand, Trump continues to deliver statements to turn the global monetary and capital markets upside down, on the other hand, gold remains on the rise. In the meantime, Bitcoin is about to hit its record level since last year. As a matter of fact, as Euro and Dollar markets keep depreciating, other forms of money continue to gain in value.
Although the rest of the crypto currencies do not show a performance as powerful as the Bitcoin’s, they can gain substantial support in crypto market. However, it will take a bit longer to make them perceived as the Bitcoin. The fact that Bitcoin almost touched USD 11K today, considering 5 years ago it was remaining around USD 500, clearly shows that this crypto currency is really carrying the torch. Whenever central banks of China or India start to tighten monetary policy, people bought Bitcoin to help it become fully institutionalized.
It’s not easy to create a crypto currency to replace the national one. First of all, there’s a huge lack of knowledge and information since a majority of society don’t know crypt currencies are issued based on what principles, which does beg the question of “Is Bitcoin an unbacked currency?”
Last week, I mentioned that Central Banks print unbacked money too. Obviously, their position as “recognised and reputable” monetary authority, such tiny details go unnoticed. People still pay attention to banknotes that feature historical figures. We all know that it’s is not easy to break an old habit.
“Mark my words…”
Today, “representative money” is at least ten times more valuable than paper money and coins. That is to say, you don’t have to worry about anything. That’s why the makers of crypto currencies should advertising and promotion in the most accurate way since so far, many people suffered losses, or got swindled out of a lot of money. Turkish people are usually very welcoming of novelties but they should be encouraged to use their savings properly.
Central Banks, Banks and other financial institutions are the backbone of payment mechanism. It’s only natural for these institutions to get rather uneasy since the creation of new currency. That is the reason why it’s not easy for them to accept a new instrument which will get integrated into money-loan-payment mechanism.
I think the biggest problems you may face when you create a new currency is that you will probably not find institutions and/or individuals quite easily that are fine with using this new currency as an instrument of exchange in market. Actually, there’s one thing that determines the value of this instrument (made to replace paper money) as a commodity: its “national and international recognition” as a currency.
So, in order for crypto currencies can get recognised, people will need to consider them as an instrument of exchange to begin with, not as a stock certificate. Otherwise, people will continue to lose a lot of money in the process and we will have to wait for 10 more years to spend crypto currencies on everyday purchases.