How Today’s Fiat Currency Inflation Is Powering Tomorrow’s Crypto Adoption Movement
Countries like Venezuela, Turkey, Zimbabwe and Iran are being embittered by high inflation rate. They are suffering infected by inflation today, others are already witnessing hyperinflation. This is making their citizens drop fiat for cryptocurrency as the only available means of storing their hard-earned wealth.
Libertarians are now preaching cryptocurrency since it goes in line with their idiosyncrasy. This time is presenting the opportunity for cryptos to replace fiat and become the only recognize form of money.
While replacing fiat may be possible for cryptocurrency, it is still a long time away from us because cryptocurrency does not have a good property to become the store of value. What this is pointing at is that, even though Venezuelan’s, Zimbabweans and Turkish adopt crypto, governments of those countries will not follow suite.
The bitcoin volume traded in those countries are insignificants and hence they cannot bring about global turnaround for crypto. These countries are isolated in nature, hence they cannot be the source of mass adoption for cryptocurrencies.
For mass adoption to become a reality, a large percentage of the population of this country must go in favor of cryptocurrency by using it for everything possible.
What will also make crypto adoption possible is that, world’s reserve currencies like JPY, EUR, and essentially, USR must be very volatile. Until this time comes, there may not be a reason for mass adoption of cryptocurrency.
While this year cryptocurrency adoption is increasing, it has still not created an avenue for mass adoption to begin.
United States has descended on Iran, with heavy sanction. This has greatly affected the country’s economy and wage a great devastation on its currency, the the rial (IRR).
At the moment, Iran is currently has nothing less than 18% inflation rate, and Venezuela has around 82%. Few months back, the inflation rate was around 8%, then it jumped to 18% in June and July.
What birthed this was Iran’s government decision to have a state-managed cryptocurrency. At this time, Iranians have already traded more than $2.5 billion in cryptocurrency.
The same exists in Turkey. The moment the US doubled the steel tariffs, Turkish delved into cryptocurrency, resulting in the falling of TRY to around 12%. When investors started departing, high number of people also started joining the crypto community.
In this wise, there has been slight benefit in the noticed inflation, but it is not enough to drive mass adoption because hyperinflation is required for this.
While there is a great potential for cryptos to become the store of value and method of payment during inflation periods, importantly, currencies like EUR and USD needs to be witnessing volatility for crypto to have a ground. If unstable countries have opportunity to store currencies using stable fiats, crypto adoption will not be possible.