For a long time, people have been using fiat currency. Today, this traditional fiat currency is systematically entrenched and rooted in the global financial system. It is regulated and managed by governments and banks around the world.
This means that these powerful intermediaries have carte blanch over our financial transactions. It isn’t wrong to say that we do not have financial liberty and are at these institutions’ mercy – we have to prove our identity, pay hefty fees, and have to wait for days for the completion of transactions.
These institutions and intermediaries have the power to hinder the use of fiat currency in regions that have ongoing conflicts or countries that are in contravention of the accepted global principles.
For instance, The West has been punishing Russia with financial sanctions for its misadventures in Ukraine. Russia has been cut off from the global financial sector and pummeled with across-the-board sanctions.
Cryptocurrencies are Better Equipped
This is where cryptocurrencies step in to rescue such bullied economies. Cryptocurrencies work independently of the global financial line and are processed online without the intervention and approval of influential intermediaries like banks and governments.
This makes sense when cryptocurrencies like Bitcoin increase in value due to a rise in global conflicts. These crisis-hit regions look to cryptocurrencies to meet their financial needs.
Carl Runefelt is an expert on cryptocurrencies who has invested in more than 360 crypto startups. While speaking on his YouTube channel, The Moon, he said, “Bitcoin is going up year over year, and in times of uncertainty, we’ve seen that people increasingly turn to Bitcoin as a form of money and store of value because Bitcoin is the only money in the world that has no political attachment. Your bank money can get frozen, or your gold can get confiscated but with Bitcoin, you can literally cross a border with your private keys in your head, and you can travel the world with millions of dollars literally stuck in your brain. This is something that has never been possible before.
Regions With a Surge in Crypto Investment
Most recently, wealthy Russians have found asylum in crypto investments after the West’s aggressive efforts to suffocate Russia and break it off from the traditional financial sector.
The contemporary Russia-Ukraine conflict has proved that cryptocurrencies can be used for fundraising in military conflicts. Not just Russia but Ukraine has been massively receiving aid in crypto – you must have heard about the ‘crypto fund of Ukraine’.
Not just this, among the most notable successes, was the recent sale of a nonfungible token (NFT) of the Ukrainian flag that fetched around $6 million in Ether crypto.
Other middle eastern tense regions like Libya, Syria, and Palestine witnessed an enormous surge in crypto searches online – a visible shift in focus from the conventional stock markets and safe-haven investments in gold and property.
While commenting in one of his interviews, Carl explained, “Gold is much better than fiat, but even then, Bitcoin has a huge advantage. This is because gold has a supply that is increasing very slowly, but it is increasing. Bitcoin is finite, so there is a small advantage there. You can transfer Bitcoin with a click of a button. But if I have to send a million dollars to gold to another country, it’ll cost me maybe more than the gold itself – the bigger the number, the harder to send.”
Backing of Super-rich Investors
The backing of influential, wealthy investors and entrepreneurs gives a bump to cryptocurrencies time and again. It doesn’t let the crypto bubble burst – if it is a bubble like some predicts – in fact, gives crypto a renewed vigor.
For instance, when Elon Musk of Tesla announced that it will soon be accepting Bitcoins for its products, the value of cryptocurrencies took off. A single tweet from such popular personalities shorts the value of crypto through the roof.
Likewise, when Tesla bought $1.5bn in bitcoin in a move that propelled the currency to a high of almost $43,500.
Will Crypto Thrive in the Foreseeable Future?
Many experts are now confidently predicting that crypto will rule the roost in near future. The time is on the horizon when cryptocurrencies will replace fiat currency as the fundamental global currency.
The digital era is upon us. This means that only those digital innovations will survive, the rest will soon see their end. Cryptocurrencies are some of the most popular digital innovations. They will prevail despite countless voices against it.
If the global economy collapses, cryptocurrencies will only rise in value and their adoption will accelerate like never before.
