[2016-09-21] How Bitcoin is Creating Financial Stability Where There is None

[BTCManagerOfficial]

In April 2013, under intense pressure from the EU, Cyprus suddenly decided to ‘bail in’ its banks, whereby 37.5 percent of uninsured deposits were converted into equity and depositors were prevented from withdrawing their funds.

As a result, bitcoin usage surged in the region as it was used as an alternative store of wealth by many of those who were not able to access their funds held at local banks. During the one-month period following Cyprus’ 'bail in', the price of bitcoin soared from around $500 to over $600 per bitcoin as people recognised its value versus traditional, fiat currencies, which could now be taken away or restricted in times of emergency, a precedent set by the events in Cyprus.

However, the incident in Cyprus may not be the only instance where bitcoin manages to emerge as a tool for financial stability for individuals in economically distressed countries. The more recent examples are the situations in Venezuela, Turkey and Brazil...

Read more here:

https://btcmanager.com/news/how-bitcoin-is-creating-financial-stability-where-there-is-none/





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[yayayo]

The Cyprus story has been told over and over again. But there is zero proof for the alleged cause and effect relationship - it's pure correlation. I think it's unlikely that the Cyprus expropriation incident had the potential to trigger an immediate price increase, simply because Bitcoin is not widely known and people would need some time to research the topic before starting to invest. It's more likely that capital flight was directed towards the traditional safe havens: precious metals.

However I do agree, that a high inflation environment like that in Venezuela and Brazil is a contributing factor to a gradual increase in Bitcoin adoption, because it triggers a search for alternatives. In fact, the reckless monetary policy of central banks around the world is the best marketing for Bitcoin there is, because when trust in the established currency erodes, people become open to experimentation. And Bitcoin is directly addressing all shortcomings of the fiat scam money...

ya.ya.yo!