Bitcoin popularity has increased due to the economic woes of some of the largest economies in the world. This has been a wake up call for many sceptics.
The increase in popularity of Bitcoin during 2016 has surprised currency traders all over the world. Bitcoin has emerged as the number one virtual currency for many good reasons. It was the first virtual currency and it evolved from some incredible foresight, it was set up by mathematicians to operate with a high level of security.
One of the most amazing things is that there was very little reason to use a virtual currency and many sceptics dismissed it as an experimental facility with little real purpose. Why did that change in 2016?
It was not the success of Bitcoin as a currency rather than a failure of some of the most traded currencies in the world due to economic instability.
Nigeria has been suffering a severe recession due to falling oil prices causing high levels of inflation. There have also been doubts regarding the stability if its banking system. Nigerians have been investing in Bitcoin due to economic uncertainty.
Similarly but more severely Venezuela, another oil-producing country has been suffering from high inflation for a number of years. Bitcoin popularity in Venezuela started increasing during 2013 but has accelerated dramatically this year when high value notes were withdrawn.
The Brazilian economy has been suffering from high inflation for several years. It’s economy is also largely oil based so the fall in oil prices hit hard. More and more. Brazilians are turning to Bitcoin which has offered greater stability.
Although India is not an oil-producing economy, it has suffered due to the government placing a ban on high value notes. The objective was to reduce inflation.
China devalued its currency during May 2016 and that has led to an unprecedented increase in Bitcoin popularity. Inflation has also been very high in China and they have instituted cash controls.
Bitcoin Value Increasing
The value of these major economies is huge in terms of world GDP and the financial effects have been dramatic. When businesses struggle people suffer to maintain standards of living when inflation becomes a major factor. It is for that reason the Bitcoin popularity has risen so dramatically.
Bitcoin value is not controlled by any government, bank or other institution and that is why is has evolved as a world currency, albeit in a virtual sense. Bitcoin Investment has increased due to its independence from regulation and control. The only factor which affects the value of Bitcoin is the market itself.
The shift towards Bitcoin is likely to continue for the foreseeable future as the economic woes of major currencies dictate greater stability. Bitcoin is the perfect solution for millions of people who want to hedge against inflation. That is of course providing the value of Bitcoin continues to hold out.
See live Bitcoin prices for the major currencies on our currency converter.
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Disclaimer: This article only represents the author’s opinion and should not be taken as investment advice.