Bitcoin Forum

as per title how you recon the market is affected by individuals in countries like turkey, venesuella, brasil, argentina, russia, china, india (etc) which currently experience major currency devaluations against the dollar? normally it would be rather common practice to hold dollars as a hedge against the central bank's fiat denominations. though in countries like india they prefer gold. so now that an alternative is present how much buying pressure would it create to perhaps affect the bitcoin trend?

Bitcoin is indeed a good alternative.

However as it is too volatile, people from those countries should keep Small amounts of btc and higher amounts of dollars, as hedge to protect themselves.

India imports a lot of oil from other countries and it is the one causing more impact on its currency devaluation. If oil prices go up then they need to spend more Indian currency to buy oil in dollars which reduces demand for Indian currencies.

Based on my knowledge if countries are allowed to trade bitcoin then people may move some funds to invest in cryptos but countries like India, they have already banned crypto trading so they may prefer to hold gold than bitcoins.

The issue is that by the time people in those countries realise their currency is devaluing, it's too late, they can't really afford to buy much bitcoin. You really need to diversify into bitcoin in the good times before the s**t hits the fan.

What if such countries decide to adopt the US dollar (or any other global global liquid fiat) as their currency when theirs get devalued, in the place of cryptocurrency that they are hesitant to accept?

It doesn't affect the "crypto ecosystem" at all.There's big inflation in Venezuela and Turkey,has this affected the current cryptocurrency prices?Nope...
What do you mean by crypto ecosystem?Crypto markets and trading?
I think that crypto ecosystem is the blockchain and all the mining ledgers.

If these all countries mentioned above was adopted bitcoin into their place then probably they have alternate currency aside from precious stones to keep as assets but since cryptos(bitcoin) was prohibited to use the Crypto ecosystem has no effect on the devaluation of the national currencies(IMO).
But even those countries prohibited crypto there are some people keep holding bitcoin as their assets.

It seems to me that the change in the exchange rate of national currencies relative to USD has no effect on the "cryptosystem". These events and news can be used to speculate with crypto-currencies.

I think that there is no global influence. Citizens of the country where the devaluation occurs will invest their savings in some assets, including crypto-currencies.

i mean the buying pressure upon various crypto assets - not just bitcoin but number of other coins too. ud be surprised but some people would rather own 3 ripple than 0.xxxxxxx bitcoin..

im trying to predict at what point would populous in those nations subjected to devaluing money realise that bitcoin at its low cost is perhaps better than holding usd. especially in places like turkey they realise that this problem is mostly political & being caused by united states foreign policy, therefore they might be reluctant holding the enemy's money, if you know what i mean..

That is exactly the only reason I believe bitcoin will definitely be higher than what it is right now.
Bitcoin will worth a lot more in the future for sure just because of two things. One is the mining will cost more because of halving, however this has nothing to do with our current topic in hand.

National currencies always devalues, look at house prices 50 years ago and look at them now. Look at the car prices, salaries, school costs, you look at ANYTHING and dollar lost value against it, burgers cost more today than 10 years ago. Now why wouldn't bitcoin be worth more against dollar over time ?

Traditionally when crap hits the fan, people go into the precious metals for stability and security until the currency market corrects.

It's possible with the growth of crypto in these emerging economies, the trend may be to go into crypto. due to the increasing ease of access  to convert Fiat to crypto.

But in saying that it is much more volatile than any precious metal..

Yes of course.People of such countries would think that bitcoin would be a much better option than holding dollars or their devalued currencies.Bitcoin is universally accepted of course.Its free from deflation as nd totally out of the reach of governments hands.

Of course I'm not an economic expert but from my view I don't see the Direct dependence between those two things because money inflation was a case always, even before cryptocurrency exist.

It might not pan out immediately seeing that only a few people really know about bitcoin but once awareness is spread across borders, people would absolutely love to use bitcoin to save them from their asset's devaluation. Right now it wouldn't cause much of a dent on the price seeing that the citizens of these economically oppressed countries are still in disbelief, but in the future, once they discovered that there's already an alternative to gold, the future is bright for bitcoin and could be used as an effective store of value and could act as a hybrid reserve for countries with high inflation rates like the one we're seeing right now (Venezuela, Zimbabwe etc.)

i think you have related the devaluation of these currencies with the power of the us dollar , these currencies are down because of their bad economy with the exception of china which have to keep their currency low against dollar for importing/exporting their goods.
US dollar isn't very stable or reliable to keep your money , it's fluctuating with trump decisions unlike gold which is a stable asset.

They do love BTC in India. The problem is that since the rupee is rather unstable the government is trying to stop people from dumping it and lowering its value even more. If your currency is going down and there are ways that you can use to move your money out of the country and even make more money by doing it, people will jump at the opportunity, just like the Chinese were doing in 2013 and 14, until their government banned BTC.

The main market pair is BTC/USD so the devaluation in those countries does not affect bitcoin too much, it is obvious that in those countries there is a market for bitcoin and their local currency but most of the time the exchange rate is very similar to the BTC/USD exchange rate.

However and inflation of the dollar is going to have a massive influence in the price of bitcoin in the future, right now the US is having the best of both worlds they can print as much currency as they want and still suffer a low inflation since many countries store those dollars, but the moment this changes and countries decide they want to exchange their dollars for something tangible then inflation will come to the US at an alarming rate and as such the price of bitcoin will be affected positively since it will be one of the few currencies able to outpace the inflation of the dollar.

This would not be the period of the discussion but as we can see different value from commodities that serves as a good asset for future purposes, that time to time there are changes of values depending on the economic process that may lead to upgrade or downgrade of economy. The negative effect that crypto currency will receive from national currencies is bad if a certain country will implement banning of crypto currency. As i know crypto is a virtual currency even thou it decreases it's price it will be dependent to fiat since we can not use crypto in reality if there is no conversion to fiat.  

what you are saying correlates with mike maloney whom i follow up. he also claims that before the usd avalanche inflation we're going to experience massive deflation first - that would be an indicator to jump the ship.

Bitcoin trend wont get affected with whatever happens to the dollar because they are not very much related with that correlation which we see in the dollar and rest of the world's fiat currencies. They are paired currencies and they are having their international relation through the stocks, international trades and relations which affects the prices lowering and ganging over the time depending upon the situation. In case of bitcoin it is completely different currency which is traded online and it is not paired with dollar or any world fiat currency. So no effect at all.

Indeed this one. I think there should not be any effect of devaluation of national currency on the crypto currency. I mean it appears that you guys are thinking it in very different way and in relation with your own national currency. But the fact is bitcoin or crypto ecosystem is not abiding to any single national currency because it is global system and it is traded and used in every single country on the earth. This means it is connected with every national currency present on the earth. Thus it means only one thing to me, there is no correlation of the two and hence no effect on one another.

I agree with others that the impact on the crypto market is probably insignificant if it's even there, but the usage by country might get affected. In Ukraine a major national currency devaluation occured 3 years ago. Dollar used to cost 8 hryvnias while the current price is pretty stable around 25-30 hryvnias. There are literally dozens of crypto exchanges into hryvnias here and I'd say a lot of young people at least heard about cryptocurrencies and blockchain. Analyzing the number of users per country is close to impossible due to the whole decentralization thing with bitcoin. I also looked at legal status of btc in the countries the op mentioned, but there are both crypto-friendly, rivals and undecided ones there, so I got nothing from that small research.

Crypto currency can serve as one of the alternative ways to protect yourself from inflationary processes in your country. However, this type of protection against inflation is better to use along with traditional methods, such as the use of foreign currencies, gold and precious stones, property and other real estate.

As I am a person who lives in Russia I know the situation inside and I know that the country has real troubles with its economics. I can say with full confidence that the devaluation of the national currency (ruble) does not affect on bitcoin and other assets nohow. The process of the national currency devaluation has the real economical reasons but the process of falling bitcoin and other crypto assets has the speculative reasons. I mean that somebody (it is rather institutional traders) for their speculative needs regardless any objective reasons.

Countries that import a lot of goods like oil or gadgets are severely affected when their currency is devalued, so they try to protect themselves by converting their cash/balances/savings into dollars, euro, gold, etc. However, some countries have limitations on this (like China), and others are probably going to have to do it soon to save their ailing economies (like Turkey). Capital controls strictly regulate transactions, and in some countries (like Azerbaijan), a person needs explicit government permission to purchase foreign currency. Also gold is a lot higher in some countries because of demand (>10% in India), so people aren't left with much choice. Bitcoin is the best solution to protect your capital.

I think that cryptocurrency is an easy way of investment, due to the devaluations, because still not have the volume that would have gone from Fiat to cryptocurrencies. Yes, I would not say that there is a devaluation as such

I also have read mike maloney and I find his thought process to be right, but just like most people, predicting when things are going to happen is difficult and his timing has been off, but it is not really complex, the US can print as much money as they want since the US dollar is still used as a way to buy oil which is basic resource in this industrial age and because it is the reserve currency of the world.

This creates the illusion the US can print all the dollars that they want since many of those dollars end up not circulating since people and governments store them, but at some point they are going to realize the US government is buying all of these materials and products with useless pieces of paper, and then when those dollars begin to circulate the inflation will come to the US and the price of everything from houses, cars and everyday items will go up almost immediately.

in theory i totally agree with you. though as far as im aware there are two types of dollars - internal & external. both look identical, the difference is withing their serial numbers. once external dollars get sucked into the internal banking sector, they are recognised & are shipped back out to be used for high level bribes, imf/world bank loans to developing countries etc..

I personally believe that bitcoin is infinitely better as a store of value than national fiat currencies.

The reason is simple. You've got a government controlling the supply of fiat currencies, and inflating that supply whenever they want means that the value of fiat currencies will always drastically decrease in the long run, as a sort of an "invisible tax".

Bitcoin is different in that its supply isn't manipulated by a central bank, nor is it controlled by anyone. As such, I do believe that bitcoin has the potential to serve as a hedge against fiat inflation in the financial world in the future, which would obviously result in increased adoption.

At present, there are no problems with the impact of electronic money on the country. Only positive trends from the community. And if there are bad signals, they are just bad guys who abuse the trust of the people. To attract assets and then disappear. It's just the sand of the desert.

Bitcoin is now a serious viable alternative as an asset to store value.

There is a difference between intentional devaluation of a fiat currency against the USD, compared to the depreciation of a currency in terms of purchasing power within its own borders. And I think that you're referring to depreciation of fiat in this case.

Bitcoin is able to benefit those in countries where prices are constantly rising due to their fiat losing purchase power day by day, including Venezuela right now. As it is a global, decentralized currency, there is no central entity that can influence the supply of BTC and thus debase it like they do with fiat.

Based on that, it wouldn't be crazy to say that an inflationary crisis in the economy could potentially bring new adopters to bitcoin, even.

If someone looking for an asset to store their money against the demonetization then bitcoin or the crypto currencies are there with the gold as other choices.It can really can create bump on the prices if the people moves towards the cryptos because of the devaluation on their national currencies but doubt that many people will pick crypto as their choice over gold.

Well, just like dollars or oil or similar objects, when national currencies devalues, bitcoin gets a higher value.
Houses are another example, you could purchase an insanely great huge big mansion in my country for 50 thousand dollars like 50 years ago, now that is just a salary for some people, nothing major, doesn't change your life too drastically, yeah you can pay debts and have good time and great 3-4 year run with that kind of money but nothing insane to change your life. Same applies for bitcoin, 50 years from now, bitcoin will worth a lot more dollars but the purchasing power may still be the same.

here is some very interesting data to global localbitcoins volume estimate as well as the breakdown by country:

https://coin.dance/volume/localbitcoins (https://coin.dance/volume/localbitcoins)

Probably, the devaluation of national currencies stimulates citizens to consider alternative means of storing their savings, one of which is cryptocurrency. Devaluation is the terrible consequences of poor government work. Unfortunately, only such situations attract literate new people with a conscious purpose in the community (Fomo does not count)

I guess devaluation of a country's currency will only affect crypto currency if and only if that said country will use crypto currency as a crutch while the said country's currency is recovering. If not the it basically doesn't affect much in terms of prices and movement. Not unless miltiple countries are affected.

It can only affect it positively actually, no matter how the government tend to drift towards. Normally, it would depend though on how enlightened the people in that country are, and how well they understand crypto space to be a good example of a place they can easily store value.

I believe in that kind of scenario, we can expect the people generally to quickly find a way to move into the crypto space, knowing there is a lot of hell coming for them, if they end up holding on to fiat. We have seen a lot of countries, in this point and we have seen the reaction of the citizens to cryptocurrency in these places.

That is one of the reasons why countries like Zimbabwe and Venezuela citizens have been able to find a safe spot for the cryptocurrency space. For instance, in Zimbabwe, due to their hyper inflated economy as well as their totally devalued and destroyed currency, they immediately saw an alternative and they pretty much jumped at it, which was one of the reasons for a very long time, it has been trading above the normal global market price. That is the effect it can have particularly when it comes to a specific country.