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Even though Bitcoin has seen a sharp price retrace over the past few days, it remains one of the most stable assets in the world today. National currencies all over the world are losing value at an alarming rate, and there is nothing to stop these negative trends. Bitcoin, on the other hand, has only gotten stronger and gained more recognition. It is only a matter of time until our brittle financial ecosystem experiences unprecedented shockwaves of turmoil, and Bitcoin may be the only currency that can withstand the pressure.
A Lot of Currencies Lost Value In 2016
Anyone who has been paying close attention to financial markets in 2016 will have noticed things have not gone all that well. Other than the Brexit, the Venezuelan Bolivar hyperinflation, and India’s banknote ban, other countries have gone through their own troubles. Mainstream media paid a lot of attention to the Yuan last year, but that was not the only currency to see its value decline rapidly.
The Egyptian Pound lost 59% of its value in 2016. That is quite an astonishing number, considering it effectively cuts purchasing power in less than half. Such a scenario would be an unheard of in the western world, but do not be mistaken in thinking that couldn’t happen to the Euro, US Dollar, or other popular currencies in the coming years.
In Nigeria, the Naira saw its value drop by as much as 37% over the course over 12 months. A similar scenario played out in Argentina, where the peso dropped by another 17%. Given that country’s inflation issue over the past few decades, it is only expected the national currency will lose value every year. Seventeen percent is not overly terrible for the Argentine peso, although there is no stopping the current downward trend.
India has shown the world how government and bank intervention can cause a lot more harm than good. Eliminating 86% of the cash supply overnight has never been a smart decision, and the country’s economy is suffering from it. It is expected the cash shortage to remain a pressing issue for at least a few more months. It goes without saying the local populace pays the ultimate price for what a few people in a seat of power decreed to be the course of action.
Bitcoin has proven to be a very different create in the world of assets and currencies. With no government or bank intervention possible, the currency is subject to the whims of the free market. Political news still influences the Bitcoin price, though, and banks all over the world continue to oppose cryptocurrency wherever they can. That is only to be expected, as currencies such as Bitcoin can make all financial institutions obsolete over time. People are in full control of their money, and they become their own bank, of sorts.
Comparing this to the stock market, it is evident traditional stocks are far from a viable investment right now. Major brand names closed 2016 with a net loss, whereas Bitcoin surged in value. It will take time for our society to adjust to thinking of Bitcoin as a currency, rather than an investment vehicle. But all of the stars are aligning for a major shakeup of the world’s economy, and the coming few years will be quite intriguing to keep an eye on.
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