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Author Topic: how does devaluation of national currencies affect the crypto ecosystem?  (Read 153 times)
wantjokull
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August 18, 2018, 12:04:11 PM
 #21

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 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.

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August 18, 2018, 03:22:58 PM
 #22

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 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.

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August 18, 2018, 04:18:45 PM
 #23

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.

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August 18, 2018, 05:23:24 PM
 #24

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.

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August 18, 2018, 06:01:10 PM
 #25

I can only say that no matter how we love cryptocurrency, we can still enjoy and need the national currencies.    

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August 18, 2018, 08:18:26 PM
 #26

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.
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August 18, 2018, 08:42:33 PM
 #27

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?

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.
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August 21, 2018, 07:42:46 AM
 #28

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

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August 21, 2018, 07:03:30 PM
 #29

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.
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.
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August 23, 2018, 02:17:55 AM
 #30

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.
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..

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August 24, 2018, 11:25:51 PM
 #31

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?

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.

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August 26, 2018, 08:13:38 AM
 #32

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

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.

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August 26, 2018, 10:38:52 AM
 #33

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 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.

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August 26, 2018, 12:05:27 PM
 #34

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.

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August 26, 2018, 04:07:50 PM
 #35

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?
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.

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August 31, 2018, 07:00:43 PM
 #36

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

https://coin.dance/volume/localbitcoins

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