At the time of writing, Bitcoin was approaching a new high of $ 20,000 per bitcoin. What has changed since reaching this height?
The Covid19 situation has changed the way people do things. Technology has come to the fore in everyday life. Things that used to be done physically are now being pushed into the virtual world – eating at school, restaurants, having fun, working and buying many goods and services. The natural adaptation to such an agenda uses cryptocurrencies. Why? It is an extension of a technologically driven world. These can be used to compete with the existing financial system at a potentially lower cost.
When Bitcoin last reached a record high, many institutions denounced cryptocurrencies as payment methods used by criminals for terrorism, money laundering, and drug trafficking. In this case, Mastercard and Visa cryptocurrencies are linked to credit cards, and Paypal already accepts the use of the Bitcoin platform. Many governments are talking about providing cryptocurrency versions of traditional currencies. Facebook did not push much to produce a cryptocurrency called Libra, which is partnered with major banks and other institutions, but it did not go far, but there is an intention. Cryptocurrencies are no longer for criminals unless the above institutions have committed a crime.
Do not adopt
The key to any technology is widespread or mass application. The more people use something, the more it needs to be used and the more important it will be. With widespread application, systems that work with the product are also beginning to change. Examples include Apple iPod, Microsoft Windows, internet providers and electric cars. With the new demand will come new products and products that are not very useful without the adoption of the original product.
Sensitivity to traditional investments
Investing in stocks and bonds is highly costly due to the Covid scenario and the resulting depression, and the underlying economy is at higher risk as it separates from these markets. High levels of debt make property investments more risky than in the past, as well as volatile rental income and people’s ability to pay their mortgages. Cash is a refuge, but rising debt and inflation prospects suggest that cash is also at risk. The concept of diversification means maintaining some of these investments, but now there is a desire to be a complement to these products. These new creatures are cryptocurrencies. This product allows you to diversify from excessive debt, foreign exchange debt and high inflation.