Category: Business & Society

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Business & Society

Rookie Mistake Alert and the Wisdom of Crypto Experts

The analogy that investing in Bitcoin is like riding a rollercoaster is appropriate. The value of Bitcoin goes through cycles of ups and downs, and parts of the ride will be scary. Really, there is no sure thing in investing, and crypto is a high-risk asset. I am not giving investment advice, only informing what the general talk is in the crypto space and learning from long-term investors. Therefore, I took a look at the biggest mistake that first-timers do when they invest in Bitcoin.

It seems that we need a strong stomach to handle the Bitcoin ride. The problem is that many new Bitcoin investors buy when the price is high and sell when the price is low.

It’s crucial to survive the first bear market!

The Bitcoin 4-year cycle is like a rollercoaster ride for the cryptocurrency. Every four years, something called the “halving” takes place. It’s when the number of new Bitcoins created gets cut in half. This scarcity of new coins tends to make the price of Bitcoin shoot up. So, you’ll see periods where the price skyrockets, and everyone gets excited. But after that, there’s usually a big drop or a bear market. It’s like a wild ride with ups and downs. By understanding this cycle, you can get an idea of what might happen next in the Bitcoin market and make smarter investment choices.

Experiencing a Bitcoin bear market for the first time can be daunting. This means that prices can drop significantly. Imagine you bought bitcoin when it was expensive, and then it dropped in value by over 75%. It can be scary! I have seen many people sell Bitcoin at a loss during times like this. In fact, Bitcoin data shows this.

Buy high:

Let’s focus on a group of investors called long-term holders (LTH). It is the people who hold bitcoin for the long term. But guess what? Even these experienced holders started somewhere. First, they can make mistakes and buy when Bitcoin is high. They learn from those experiences and become smarter investors over time. I would like you to be one of those smarter investors.

Sell cheap:

Now let’s talk about when people sell Bitcoin. When the price drops, investors may panic and sell bitcoin for even less than the price they bought it for. It’s like selling at a loss. This can happen if the price drops more than 50% of its value. Not a good situation.

Immediate Surrender:

Alert! Data suggest that we are in this period of time at the moment. We are likely roughly at the bottom of the rollercoaster and have started to go up. But beginners are shaken by the ride down. During this difficult time, when many investors are stressed and sell their bitcoin. Data shows that we have noticed a pattern. There are certain moments when new investors unfamiliar with Bitcoin sell the coin in large numbers. It’s like following the crowd and making the same mistakes.

Long-term learning curve:

It turns out that investing in Bitcoin takes time and experience. Remember: Novice investors often buy when Bitcoin is high and eventually sell when it is low. What to look for? There are signs you can look for to understand when these errors occur. For example, if you see a lot of people selling Bitcoin at a loss and the price is dropping further, it’s a sign that many novice investors are panicking.

If this is your first bear market, the statistics show that we need to be patient and strong and resist the urge to follow the masses.

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Business & Society

From Tough Stance to Open Arms: UK & Europe Welcomes Crypto

Those of you that are new to crypto should know that the industry has been hurting for lack of regulation for many years. I know! Regulation sounds boring. But it’s needed before the public will accept crypto as a viable asset. Today, I come with good news for Europe.

While countries like Dubai and Singapore have been competing to attract crypto firms, the U.S. has taken a tough stance with increased enforcement actions against cryptocurrency companies. 

Britain wants to become the go-to destination for crypto firms! Prime Minister Rishi Sunak, formerly the U.K.’s finance minister, boldly declared his ambition to make Britain a “global hub for cryptoasset technology.”

And the latest exciting news is kind of funny considering that the general public does not embrace crypto yet. King Charles has given the green light to a bill that empowers regulators to oversee cryptocurrencies and stablecoins in the U.K. This bill, known as the Financial Services and Markets Act, has gone through the final stage and received royal assent, officially becoming law.

The aim of this legislation is to effectively regulate crypto and stablecoins, ensuring their safe adoption within the country. It gives regulators more authority over the financial system, treating all crypto activities as regulated and keeping a close eye on crypto promotions. Payment rules will also apply to stablecoins.

Who’s in charge of enforcing these new regulations? The Treasury, Financial Conduct Authority, Bank of England, and Payments Systems Regulator will soon have the power to introduce and enforce rules in the crypto sector. The U.K. government has been actively consulting on proposed rules since February, with the goal of establishing the nation as a thriving crypto hub.

Remember that the European Union has also made strides in the regulatory landscape. On May 31, they signed the Markets in Crypto-Assets (MiCA) regulations into law. This significant step ensures consistent regulations across all 27 EU member states, allowing approved firms to expand their business with minimal additional paperwork. 

Things are surely picking up for crypto in the European region.

Those of you that are new to crypto should know that the industry has been hurting for lack of regulation for many years. I know! Regulation sounds boring. But it’s needed before the public will accept crypto as a viable asset. Today, I come with good news for Europe.

While countries like Dubai and Singapore have been competing to attract crypto firms, the U.S. has taken a tough stance with increased enforcement actions against cryptocurrency companies. 

Britain wants to become the go-to destination for crypto firms! Prime Minister Rishi Sunak, formerly the U.K.’s finance minister, boldly declared his ambition to make Britain a “global hub for cryptoasset technology.”

And the latest exciting news is kind of funny considering that the general public does not embrace crypto yet. King Charles has given the green light to a bill that empowers regulators to oversee cryptocurrencies and stablecoins in the U.K. This bill, known as the Financial Services and Markets Act, has gone through the final stage and received royal assent, officially becoming law.

The aim of this legislation is to effectively regulate crypto and stablecoins, ensuring their safe adoption within the country. It gives regulators more authority over the financial system, treating all crypto activities as regulated and keeping a close eye on crypto promotions. Payment rules will also apply to stablecoins.

Who’s in charge of enforcing these new regulations? The Treasury, Financial Conduct Authority, Bank of England, and Payments Systems Regulator will soon have the power to introduce and enforce rules in the crypto sector. The U.K. government has been actively consulting on proposed rules since February, with the goal of establishing the nation as a thriving crypto hub.

Remember that the European Union has also made strides in the regulatory landscape. On May 31, they signed the Markets in Crypto-Assets (MiCA) regulations into law. This significant step ensures consistent regulations across all 27 EU member states, allowing approved firms to expand their business with minimal additional paperwork. 

Things are surely picking up for crypto in the European region.

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Business & Society

US Stifling Innovation? China Seizing Crypto Opportunities

The USA is the biggest crypto market with 46 million crypto holders, but unclear rules and regulations are causing crypto investors and companies to leave the country. Meanwhile, China is opening its doors. Crypto! Welcome to China!

 Frankly, the US needs to get its sh.. together before it has created a truly unfriendly environment for innovation. The traditional finance sector and the government are both successful and unsuccessful in trying to crush crypto. Crypto regulation is still being affected by guiding principles that were created in the 1940s… and the first major blockchain Bitcoin was invented in 2009. How stupid is that? No wonder the regulatory crypto environment is a complete mess in the US. Meanwhile, arch-nemesis China, who loves money, has seen an opportunity.

 But China has not always had a passionate romance with crypto. In late 2001, China’s central bank declared all cryptocurrency-related transactions as illegal, which was the strongest move against the digital asset industry thus far. But China has banned cryptocurrencies at least 7 times…

 After considerable political struggles with mainland China, Hong Kong needed to build a business-friendly environment and has opened its doors to crypto trading. In fact, Hong Kong’s treasury chief says that they need crypto regulation, but he insists that crypto is here to stay. He is basically saying “game on” for crypto, and Hong Kong is creating a global hub for crypto.

 It is not yet clear which cryptocurrencies will be available for retail customers on exchanges, but rumors in the crypto community say Bitcoin, Ethereum, Litecoin, Solana, Cardano, and Polygon are likely cryptocurrencies. Is Hong-Kong based crypto exchanges the first step to mainland China?

 Yes, this is bullish news for the crypto industry, but it will take some time for Hong Kong-based exchanges to get approval to open up. Therefore, a “boom-to-the-moon” scenario is not likely in the short term. But Hong Kong adds to a future bull run!

 It’s strange, Chinese policymakers have embraced blockchain as a game-changer, with President Xi Jinping declaring it a cornerstone of future innovation and industrial transformation. Whereas the US president has called for an “unprecedented focus of coordinated action” from federal agencies in mitigating illicit finance and national security risks posed by cryptocurrencies. Regulate through enforcement is the hallmark of US regulatory bodies. This is stupid! Did you know, according to Chainalysis, illicit addresses made up only 0.24 percent of the total cryptocurrency transaction volume in 2022. Say no more…

 Yes, the US is ranked nr:5 in the 2022 Global Crypto Adoption Index and has come further than China which is ranked as nr:10. Western countries would like to think that the US has a brighter crypto future despite the current unclear regulations. I believe so too. I fear the future of a digital China which has complete control of its citizems financial life through a programable coin. The digital yuan is here and should be feared. 

 But US regulatory bodies need to focus more on the possibilities of blockchain technology. As well as to create a business friendly landscape. Not mostly on the 0.24 percent of the crypto volume which is bad. Let’s be smart, instead.

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Crypto in the Dark: Embracing Change and Uncertainty

Change is inevitable in life. We need to be able to live life in the unknown. Sometimes we need to put our trust in ourselves or in something bigger to take the next step. It’s like standing in a completely dark room and not knowing where to go, and all you need to do is trust your judgment and take a small step in one direction to find light. It’s the same in crypto. Things happen quickly, and we need to consider our next step.

The past week started off well, and then the world’s largest crypto exchange was caught in the legal crosshairs of U.S. regulators. Binance and its chief, Changpeng Zhao, found themselves facing a barrage of charges—13 to be precise—for allegedly skirting U.S. securities laws. The Securities and Exchange Commission (SEC), as well as the Commodity Futures Trading Commission (CFTC) and the Internal Revenue Service (IRS), have all been poring over Binance’s operations over the last few months. The SEC alleges that Binance was actively trying to evade U.S. securities laws to keep American investors using their platform, a move they described as an “extensive web of deception.” The crypto market fell instantly, and no one knows what will happen in the future. In fact, suddenly, the SEC claims that massive crypto assets like Solana, Cardano, Matic, Filecoin, Sandbox, and a few more are labeled as securities. The word in the crypto space is that it’s a big deal and yet a big nothing burger. U.S. regulators are just looking for a piece of the pie. The fear is that the continuous lawsuits against cryptocurrencies are part of a larger scheme to stop crypto and create a central bank digital currency. Sometimes that crypto room gets dark, and we need to stick to our belief in what the future holds.

…But hey dear reader, there’s good news. The Markets in Crypto Assets (MiCA) law, proposed by the European Commission in June 2022, may have far-reaching positive implications for the industry. There’s increased clarity in Europe. While asset managers believe crypto to be a long-term investment, the mainstream is still cautious due to the lack of regulation.

However, the increasing adoption of cryptocurrency and blockchain technology by businesses suggests that more and more people are willing to take the risk and dive in. It’s no wonder that many in the industry compare crypto to the internet in the ’90s – full of opportunities, risks, and the promise of the unknown. We need to stay up to date with developments and consider which blockchain technology has a great use case and the potential to be a part of future society. Then take the next step. The future is bright for those who embrace change and uncertainty.

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Great Crypto Assets Takes Great Parenting

When I started being interested in crypto I thought that the crypto currencies where finished products and where supposed to operate smoothly. Little did I know that the space is highly shape-shifting and eventful. The space is like the internet of 1996 and the future is in many ways unknown. Just like parenting requires care, attention, and guidance to raise a child, managing crypto assets also requires work.

When I started being interested in crypto I thought that the crypto currencies where finished products and where supposed to operate smoothly. Little did I know that the space is highly shape-shifting and eventful. The space is like the internet of 1996 and the future is in many ways unknown. Just like parenting requires care, attention, and guidance to raise a child, managing crypto assets also requires work.

I would like to make the argument that they are complex software companies that operate in the digital world. We may not like it, but software companies constantly update their technology.

Blockchains are built on advanced technology that goes way beyond simple transactions of a coin. They’re like intricate software systems that require specialized knowledge and expertise to develop and maintain. Without too going technical… there are complex algorithms, cryptographic techniques, and consensus mechanisms that ensure the security and integrity of the blockchain network. Teams of developers, engineers, and experts and the biggest blockchains like Ethereum and Solana boast 1000 or more developers. To put it in perspective, Microsoft has over 100.000 software engineers working on different software. Just like PC owners know the feeling of constant updates of the Office program, crypto currency holders should expect bugs and updates of their favorite coin. But what are blockchains working on?

Developments includes improving security measures, enhancing scalability, and exploring innovative solutions. Some blockchains actively encourage user engagement and participation to gather insights and understand the needs of their community. They use online forums, community discussions, and open-source collaborations to create an environment where users and developers can contribute ideas, report issues, and propose improvements. A good crypto asset is creating a decentralized governance system where users can participate in the decision-making process. This is truly revolutionary.

What else are they working on?

Blockchains thrive in an interconnected ecosystem. Put is differently. They need to be able to work together to operate effectively. Blockchain companies collaborate with various stakeholders, such as developers, businesses, and other blockchain projects, to create a network effect. This collaboration fuels innovation, interoperability, and the development of new applications and use cases across different industries. In a way, interconnected cryptocurrencies allow people to travel freely between different platforms and use their local currency wherever they go. Afterall, we want to be able to use our money outside our own little town.

Perhaps the most headache for the crypto business is the lack of clear regulation in many nations. Knowing what is legal and adjusting accordingly is key for the success of the blockchain. The most famous case is the blockchain company Ripple that has been in a court case against the SEC in the USA for over 2.5 years. A settlement might be coming soon folks… I digress.

As blockchain technology gains traction and integrates into traditional industries, compliance becomes essential. Blockchain companies work to ensure that their solutions align with existing regulations while preserving the core principles of transparency and decentralization. This is no easy task. This often involves adapting to changing legal landscapes, data privacy regulations, and industry-specific compliance standards.

In fact, anyone can create a crypto currency it in just a few minutes with little or no knowledge of programing. The creation of a meme coin is like getting pregnant after a bad one-night stand… maybe an abortion should be considered!? However, the birth of a long awaited, necessary, and revolutionary digital asset is developed through great parenting.

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“The Great Hibernation: Why Most People Tune Out of Crypto during Bear Markets”

I’ve been think about why people tend to lose interest when the market goes bearish. What is the real reason? Here’s what I think.

Imagine prices dropping and the general atmosphere being gloomier than a rainy day. It’s no wonder that people start feeling fearful and uncertain about the future of cryptocurrencies. The potential for major losses and intense volatility can make folks hesitant to be involved or even keep up their interest in the market.

In fact, human brains are wired to feel losses more powerfully than gains. It’s sort of a survival instinct. It’s also a mind-trick called “loss aversion,” and it’s something we all fall for. In a bear market, the negativity and falling prices skyrocket the fear of losing money. This aversion to potential losses makes people want to steer the hell away of volatile crypto assets until the market looks more promising. Perhaps its a healthy approach!?

But wait, there’s more! Humans love quick, easy wins and immediate rewards. Give us a lottery ticket, and we’ll be all in! But unfortunately, crypto investments, especially during a bear market, might not give you that sweet instant gratification. Unless you were among those that bought the meme coin ”pepe” and enjoyed a trip to the moon… I hear that a lucky few have become millionaires from investing only a couple of hundred US dollars. However, short-term gains are usually in short supply, making it hard for people who crave immediate rewards to stick around. By the way. Please do not buy pepe! It’s a useless coin with no future to show for.

Let’s be real though, cryptocurrencies can be a bit mind-boggling. Even though they’re becoming more popular, many people still don’t fully understand the underlying technology, the benefits, or the risks involved. Add in a bear market with its negative vibes and media buzz, and you’ve got a recipe for folks shrugging it off instead of taking the time to educate themselves and dive into the market.

And just like the saying goes, “monkey see, monkey do,” humans can be monkeys too when it comes to following the crowd. In a bear market, when most people are feeling down on crypto, there’s a strong urge to join the pessimistic party. We like to align ourselves with popular opinions, and that herd mentality can suck the interest right out of the crypto space. Aq

But don’t lose hope just yet! There are still those confident individuals that despite the market’s current state, believe in the long-term potential of the technology. Yes, I am one of those people. Perhaps even you!? We understand what crypto is about and how it can improve our society.

So, my dear reader, I hope this article has shed some light on why people head for the hills during bearish markets. And if you’re still holding on to your crypto assets, power to you! Just remember, the market is a wild ride, and it takes a special kind of grit to ride out the bearish storm.

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Vulcanoes Creating Bitcoin – How it works and who is doing it!?

I have been thinking about Bitcoin mining and how a few countries are using vulcanoes to mine Bitcoin. Yes, Bitcoin is created by mining. Let me explain.

Bitcoin mining is a process that involves solving complex mathematical problems to validate and verify transactions on the network. It requires substantial computational power, leading to a significant demand for electricity. Historically, many Bitcoin mining operations relied heavily on fossil fuels, particularly coal, which contribute to greenhouse gas emissions and environmental degradation.

But nowdays, nations in the forefront of the Bitcoin revolution are creating money (Bitcoin) by using geothermal energy.

So, what exactly is geothermal energy, you ask? It’s like harnessing the fiery inner core of the earth to generate electricity. Crazy, right? But it’s true! And the best part is that it’s a renewable, eco-friendly source of power that’s just waiting to be tapped.

Here’s how it works: experts identify areas with high geothermal potential, and power plants are constructed near those hotspots. These plants then use trapped heat from the earth to generate steam, which drives turbines connected to generators that produce electricity. That electricity is then sent over to the mining facilities, powering the complex calculations needed to mine Bitcoins.

Pretty cool, huh? But it gets better! Geothermal mining is not only good for the environment, but it’s also cost-efficient in the long run. Once the initial infrastructure is up and running, operating costs are significantly lower than traditional methods. Plus, it offers locational flexibility, which means that mining operations can now set up shop in regions that were previously inaccessible or unsuitable.

So, where can we find geothermal Bitcoin mining in action? El Salvador is paving the way with their state-run geothermal energy utility that’s using power derived from volcanoes to mine Bitcoins. Over in Indonesia, they’re exploring how Bitcoin adoption can benefit their people, utilizing their massive hydropower potential. And let’s not forget Iceland, with almost 100% of their electricity coming from geothermal and hydroelectric power – they’re a pioneer in sustainable Bitcoin mining.

Now, sure, there are a few challenges to overcome too. Establishing geothermal power plants requires a significant initial investment and a lot of expertise in assessing geothermal resources. But the benefits are said to outweigh the costs.

To me, using volcanoes to create money is mind-boggling and makes Bitcoin even more valuable. The energy-intensive nature of Bitcoin mining distinguishes it from fiat currencies, which rely on centralized authorities to control their issuance. Unlike fiat currencies, which can be printed at will, Bitcoin’s limited supply and the energy required to mine it give it inherent value and resistance to inflation.

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Is Crypto a Long-Term Investment?

…and I wonder if crypto is a smart long-term investment!? Not just a gamble. After spending time in the crypto sphere, you get used to a volatile market and unpredictability with a potential dream of a quick buck. But what has turned so many people into believing crypto is the ultimate long-term investment? I would argue that the masses are following in the footsteps of where big-time money is going.

Naturally, any long-term investment needs to be in assets that can revolutionize industries and shape the future. Enter blockchain technology that is transforming society, business, and finance.

One fund that commits to long-term investments is Cyber Capital, headed by Santosh Naidoo. Naidoo believes that blockchain technology is going to revolutionize multiple industries, and cryptocurrencies will play a crucial role in keeping the ecosystems alive. The belief in the transformative power of blockchain technology drives Cyber Capital’s commitment to a long-term investment strategy, as they recognize the significant impact that cryptocurrencies will have in shaping the future.

Similarly, Peter Habermacher, co-founder of Aaro Capital in London, also affirms their firm’s focus on crypto-assets’s immense transformative potential and Distributed Ledger Technology (DLT). He emphasizes the unprecedented value creation that will naturally follow the widescale adoption of these technologies.

The message from asset managers is clear: big investors in the crypto world focus on long-term horizons.

There are several other investment funds that have invested in blockchain companies and cryptocurrencies

  • Amplify Transformational Data Sharing ETF (BLOK),
  • Siren Nasdaq NexGen Economy ETF (BLCN), 
  • First Trust Indxx Innovative Transaction & Process ETF (LEGR),
  • Bitwise Crypto Industry Innovators ETF (BITQ),
  • VanEck Vectors Digital Transformation ETF, 
  • Capital Link NextGen Protocol ETF and Global X Blockchain ETF.

BlackRock, the world’s largest asset manager with over $9.5 trillion under management, has been inching towards cryptocurrency over the last few years. They have formed a partnership with publicly traded crypto exchange Coinbase to make crypto directly available to institutional investors.Yes, they are opening the doors to institutional investors to invest in the future of crypto. What’s more?

Apple Pays VP Jennifer Bailey, believes that crypto has “interesting long-term potential”.

Expedia, Subway, Paypal, Home Depo, Shopify, Microsoft, Starbucks accept Bitcoin as payment.

According to Coinatmradar, the number of cryptocurrency ATMs has exceeded 24,000 globally. A total of 75 countries have crypto ATMs. There are multiple crypto credit cards that you can use to spend your crypto.

and listen to this! Global adoption of Bitcoin and cryptocurrencies surged 881% from July to June 2021 according to Chainanalys. 881%!

Sure, there are many problems and uncertainty in the high-risk crypto space.

But adoption is booming, regulations are catching up, tech is advancing, and the market is slightly less volatile and more mature. I see many signs that crypto is a long-term investment.

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Breaking News: Europe Shows Support for Crypto

Top crypto news, the European Parliament has passed the Markets in Crypto-Assets Act (MiCA), which aims to create a licensing regime for digital asset service providers in the EU. The bill received overwhelming support in the vote conducted in April.

The fundamental goal of MiCA is to ensure that cryptocurrency transactions comply with financial laws by tracking data and disclosing, approving, and monitoring transactions to prevent money laundering.

The regulatory framework will promote market integrity and financial stability by regulating public offerings of crypto assets. The bill also includes the implementation of “travel rules” used in traditional finance to cover transactions from self-hosted wallets worth more than €1000 when interacting with hosted wallets managed by crypto service providers. More laws may sound like a blow to the crypto industry, but its great news for further adoption of crypto in Europe.

The introduction of the Mica Bill has been welcomed by many in the industry as it provides much-needed clarity and guidance to cryptocurrency investors. This will make the law easier to understand, allowing investors to make informed decisions and reduce the risk of inadvertently breaking the law. The bill means that cryptocurrency companies will need a license and customer protection to issue and sell digital tokens in the European Union.

According to Albert Isola, the UK Gibraltar government’s secretary of state for digital and financial services, the introduction of new crypto-specific legislation will bring greater transparency, better protection for retail investors, and make the market much more accessible, stable, and safe. He says that several global crypto companies have already expressed interest in being licensed and allowed to operate in the EU.

Clear regulation is key for crypto adoption, and other countries have already introduced clear regulations for the crypto industry, with positive effects on society. For example, Japan has had clear regulations since 2017, resulting in increased investment and innovation in the industry. Similarly, Switzerland’s friendly stance towards cryptocurrencies and clear regulations have attracted many cryptocurrency companies and investors, leading to a thriving ecosystem.

Crypto seems to blossom in many nations except in the US which holds 30 % of the global crypto market. The questions are many in the US. Is Ethereum a security? Is the US fighting profitable yields in the Defi space? What is legal in Fintech? The crypto space is hoping for the firing of SEC chair Gary Gensler (the incompetent cop on the beat) as he has failed to provide clear regulations and created an unfriendly environment for crypto innovation in the US. The biggest, US based exchange Coinbase is opening up their business in crypto haven Bermuda due to regulatory uncertainty.

I believe that the Mica bill is a positive step forward for the European cryptocurrency industry, providing clear regulation to protect consumers and reduce risk while opening the door to more investment and innovation. For example crypto-asset service providers will be required to adhere to stringent standards designed to safeguard consumers’ wallets. Moreover, in the event of investors’ crypto-assets being lost, these providers will be held accountable and subject to liability. With the Mica-bill consumers will sleep better after investing and storing crypto in their wallet.

Europe is showing a clear positive attitude towards blockchain technology and its potential benefits for society.

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Bitcoin – A Future World Reserve Currency!?

What is a world reserve currency and why is it important? Simply put, a world reserve currency is a currency that many countries agree to use when doing business with each other. There are several world reserve currencies. Global key currencies include US Dollar, Euro, Japanese Yen, British Pound, Swiss Franc and Chinese Yuan. The US dollar currently holds the position of the world’s most popular reserve currency. However, history has shown that the life expectancy of fiat currencies is only around 100 years.

Throughout history, global reserve currencies have collapsed for a variety of reasons. For example, the collapse of the British pound as the world reserve currency was caused by a combination of factors such as the demise of the gold standard, the decline of Britain’s economic power, and the country’s rising debt after World War II. .

Similarly, the US dollar, which has been the world’s dominant reserve currency since the end of World War II, may face challenges that could lead to its demise. Rising debt, persistent trade deficits and declining confidence in the US economy may have contributed to the dollar’s loss as a major global currency, they argue.

Why is it good to be the dominant world reserve currency?

Because many central banks and financial institutions around the world want to hold U.S. dollars and dollar-backed securities like U.S. Treasury bonds, there is strong demand for U.S. dollars. That demand, in turn, allows the United States to borrow more cheaply (at lower interest rates) than it would otherwise.

Bitcoin enters the room and Hillary Clinton get’s scared.

The US Senator Hillary Clinton, and other top government officials argue that if more and more countries and individuals begin to adopt cryptocurrencies as an alternative to fiat money, the demand for the dollar could decrease, potentially leading to its collapse.

But a collapse of a world reserve currency is a complex process that can take years or even decades to unfold. Therefore, predicting the demise of the U.S. dollar or any other reserve currency is difficult, as it depends on a wide range of economic, political, and social factors.

It is also difficult to predict which currency will replace the US dollar as the dominant world’s reserve currency. Morgan Stanleys global strategist argue that Bitcoin is making progress towards replacing the US dollar as the world’s reserve currency. Others believe that China’s yuan could become an alternative reserve currency. It is difficult the predict which currency will be widely accepted globally as the medium of exchange and store of value. But Bitcoin has potential. 

Would Bitcoin be a good world reserve currency?

Presently, Bitcoin would not be a good world reserve currency since its not globally accepted as means of payment and its value is highly volatile. Bitcoin could also contain unexploited flaws on the blockchain which raise security concerns. Furthermore, Bitcoin does not have any physical form. Additional arguments against Bitcoin becoming a world reserve currency are the question if powerful governments are keen to formally hand over the control of a currency to a peer-to-peer network. In fact, the decentralized strength of Bitcoin makes may be seen as a weakness in becoming a world reserve currency as nations would want to be able to control the currency.

But there are also many reasons why Bitcoin has potential. Bitcoin takes away the power of faulty and corrupt governments as it’s decentralized. This unlike traditional currencies that are controlled by governments and central banks. In short, governments are not able to endlessly print money and therefore inflate the currency. Bitcoin on the other hand has built in deflation.

Second, Bitcoin is a digital currency that can be sent and received anywhere in the world with an internet connection, making it an ideal currency for international trade. Sure, there are even faster cryptocurrencies for this function but never mind.

Third, Bitcoin has a limited supply of 21 million coins, which makes it a scarce asset. Whereas there is 20.354 trillion dollars in circulation and since 2020 the USA has printed 80% of all US dollars in existence. Jesus! That’s how crazy the money printing press has been the last 2 years in the USA. Of course, there is going to be inflation.

Fourth, even though there are some security concerns Bitcoin can also be argued to have a high level of security due to its blockchain technology.

There you have it folks. What do you think? Will Bitcoin become a world reserve currency?