Inflation is rampant in Turkey, and at times the Turkish lira depreciated by up to 30 percent against the leading currency, the US dollar.
Some of the people threatened by inflation seek refuge in Bitcoin.
Inflation is a phenomenon that has become an integral part of today’s macroeconomy. The ECB issues an inflation target of about two percent per year. Especially in economically turbulent times this is supposed to give an additional incentive to consumption and investment. But the side effects can be serious. Especially when inflation targets are missed or even deliberately opened up in order to make debt-financed public financing possible.
It is a privilege that Europe still has a relatively moderate inflation rate. You don’t necessarily have to look to Venezuela or Argentina to see what happens when the money printer runs in a permanent state. High inflation also exists in Turkey and thus in the immediate vicinity of the EU. The Turkish lira has been in free fall since the beginning of the year and has already lost around 27 percent in value by 2020.
The fact that Bitcoin enjoys popularity in the Mediterranean state is then not surprising.
In Turkey, the Philippines or Argentina, they flow into the Bitcoin market. The Bitcoin value promise is simply more obvious for humans, who must live with a dysfunctional financial system,
summarizes Dan Morehead, founder of the crypto-fund Pantera Capital, the Bitcoin promise in episode 279 of What Bitcoin Did Podcast
BlackRock economist considers Bitcoin a long-term trend
More and more institutional investors are jumping on the Bitcoin train. Recently the international chief investor of BlackRock, Rick Rieder, also announced his interest in BTC. The CIO told CNBC:
„It’s hard to say whether it’s [#btc] worth the price it is trading at today. But do I think it is a durable mechanism that-do I think could replace gold to a large extent? Yeah I do, because it’s so much more functional,“ says BlackRock’s Rick Rieder.
Do I believe that this is a sustainable trend that could replace gold to a large extent? Yes, I do, because it is so much more functional.
Even short revelation oaths like this are food for the Bitcoin bulls. After all, BlackRock is the world’s largest asset manager with seven trillion US dollars AUM. While a few years ago, hardly a cock crowed after Bitcoin, now more and more well-known representatives from the traditional financial sector are jumping on the crypto train. If BlackRock BTC should take with the help of an investment product into the program, the crypto market would have the most financially strongest public at all from now on immediately at the disposal.
What do the Halvings mean for the share price?
The role of Bitcoin Halvings, i.e. the periodic halving of the inflation rate, for the share price is controversial. Authors such as PlanB, creator of the Stock-to-Flow model, see the halving events as a dominant factor in the process of price recognition.
Bitcoin enthusiast and author Nic Carter takes a somewhat different view. In an interview with Bloomberg TV, the Bitcoiner sees exogenous factors such as the extremely expansive monetary policy of the central banks as price drivers.
„I don’t think the halving had a meaningful effect on the price of bitcoin.
The halving, on the other hand, „had no really significant effect on the course,“ said Carter. After all, it was clear from the outset when and how many BTCs would be emitted. According to the efficiency market hypothesis, the halving should therefore have been priced in long ago.