Proof That Bitcoin Trumps Fiat: Leveraging the Price of BTC Against National Currencies
Bitcoin has surged against many national currencies this year, beyond 128% in some instances.
Both momentum and sentiment for bitcoin is strong as of late August this year- a trend that most analysts and experts expect to continue on into the new year. Despite the dip seen at the beginning of September, most investors still remain resolutely bullish. Specifically, when the price of bitcoin is waiting against some of the world’s top currencies YTD.
Seeing such a strong rally after the market paid devastation that was experienced in March has many investors glued to their exchange platform of choice. Particularly amongst new investors and sites like Bitvavo, dedicated to helping traders and hopefuls enter the market with confidence.
Bitcoin has long been divergent from legacy and traditional markets, instead aligning itself with time-proven safe havens like gold. Many look forward to a continued positive trend as stimulus packages could realistically precede a drop in currency value, propelling bitcoin’s value and validity even further.
Performance Against Top World Currencies
• Brazil: 128.4%
• South Africa: 108.2%
• Turkey: 106.5%
• Argentina: 103.5%
• Russia 97.7%
• Mexico: 94.9%
• Colombia: 92.5%
• Indonesia: 82.1%
• Chile: 81.9%
• Norway: 76.1%
• India: 75.2%
• New Zealand: 72.4%
• South Korea: 70.8%
• Singapore: 70.7%
• Canada: 69.4%
• United Kingdom: 68.5%
• United States: 66.5%
• Hungary: 65.8%
• Israel: 64.3%
• Japan: 62.4%
• Poland: 62.0%
• Australia: 61.9%
• Czech Republic: 61.8%
• Sweden: 57.6%
• Euro: 57.3%
• Switzerland: 56.0%
Historically, bitcoin has performed well against devaluing currencies, particularly those that have engendered a high rate of inflation. In countries like Venezuela and Argentina, when bitcoin has become an enticing hedge against rampant hyperinflation, values have been seen to surge.
Furthermore, in countries with favorable legislation and/or political unrest, the crypto business seems to be booming, as locals seek better choices for financial security. But these countries aren’t the only ones where bitcoin gains are absolutely crushing the national competition. In places like the European Union and United States, bitcoin has seen 57.3% and 66.5% gains, respectively.
DeFi Holds Attention
Despite the bearish numbers, outlooks are still largely positive as investors continue to pump into decentralized finance (DeFi), looking for gains during the consolidation. There are currently over 74,000 BTC in use on the DeFi ecosystem, which has many looking towards a solid bump following this seemingly bearish downturn. An ecosystem which allows investors to collect ‘dividends’ on locked up liquidity.
Traditional risk markets are also seeing a downturn at this time; however, few have the rally that bitcoin saw earlier this year to fall back on. The positive sentiment doesn’t necessarily include a sought-after V-shaped recovery, as many investors are cautiously accepting the idea that while they expect the market to rebound, it could take some time.
Largely attributing the recent drop to a growing risk-off sentiment, coupled with mass miner selling and DeFi exhaustion. But adoption continues to soar as major online retailers continue to pick up bitcoin and other cryptocurrencies as accepted payment methods.
Growing Concern for Fiat
There are also rumblings from most investment communities to expect a continued distrust of national currencies and fiat systems as lockdown measures continue to wage war on local economies. As governments worldwide continue to push towards cashless societies, despite blowback from concerns over growing centralized authority structures.
As mentioned previously, bitcoin has been long proven to perform incredibly well in environments where hyperinflation and wanton monetary practice further support public disapproval of national currencies. As quantitative easing measures, hyperinflation, and poorly planned economic policy designed as little more than stop gaps, could spell disaster for the value of fiat; and for the livelihood for those that rely on it.
Whether or not this is the in that bitcoin investors have been waiting for has yet to be seen- but it does provide the much-needed space for investors and DeFi systems that could reasonably dovetail into the public sector. Bank of England Governor Andrew Bailey was recently noted to suggest a favorable desire to coordinate global regulation regarding stable coins, as public sentiment for crypto adoption continues to surge. Making it likely that another rally is on the horizon.