Bitcoin May Behave as “Prison Cigarettes” in Financial Crisis
Interview with John Vaz, economist and academic at Monash University, proclaims that the expectation for Bitcoin (BTC) and cryptocurrency is hanging with an answer from governments to the widespread economic emergency.
John intensified the significance of wider adoption and approval of cryptocurrencies, in relation to Bitcoin’s position as a money commodity in the context of worsening economic emergency to cigarettes in lockup.
In a short span, Bitcoin associate with mainstream markets
A short phrase, Vaz is unsurprised about the lowered Bitcoin price. Affirming that Bitcoin underwent from the liquidity emergency as most markets. Reported that “When things go into chaos, people dump them, “.
John intensified that “everything has taken a downturn at the moment,” noting that only a handful of “commodity-type assets” similar to gold as ‘safe havens’ not glimpsing the similar sharp price declines.
The economist interprets awareness of the U.S. dollar as “bizarre,” claiming the greenback “is probably the most poorly managed asset.”
“The bizarre thing is that the U.S. dollar is seen as a safe haven and it’s probably the most poorly managed asset […] given some of the expenditure that’s going on in the U.S. — huge unfunded tax cuts given to corporate sector and so on, large defense spending, and now even larger spending for economic stimulus. So how will that be dealt with?”
Economic mismanagement demonstrates ‘opportunity’ for Bitcoin
Nonetheless, amid widespread economic mismanagement, Vaz specifies the “opportunity” for crypto assets to develop as “an alternative currency with some stability and protection from the basement.”
John claimed that the exact economic strategies “that motivated the creation of Bitcoin and cryptocurrency in the first place” are “going to be running on steroids post-crisis.”
Most of the countries will undergo a circumstance where “they want to protect their currency from devaluation [and] implement currency controls,” acknowledging that “cryptocurrency could become very attractive for a lot of markets as a way of subverting currency controls.” acknowledged by John.
The cryptocurrencies are impartial as of fiat currencies, as “you don’t have banks or governments hijacking losses and privatizing the profits,” According to Vaz, adding “There is less opportunity for those sorts of things with cryptocurrency, so that makes them attractive potentially as an alternative form of money.”
Bitcoin as ‘prison cigarettes’ amid financial collapse
Nevertheless, Vaz underscores that Bitcoins’ success will confide on whether cryptocurrency fulfills expansive adoption, extremely among the organizations.
“Historically, money has value because people use it and believe it’s worth using. Cigarettes are money in prisons — no one thinks of it as money, but you can get someone probably beaten up, or killed, or whatever the criminals do for cigarettes. Now, it isn’t worth much more than cigarettes, but in prison, it’s probably as good as gold.”
Eventually, John reported that “how the government and how the economy is managed are going to be crucial in the Western world, and [may] create the opportunity for cryptocurrency,”.
According to John, crypto will succeed is “completely dependent on how many prisoners are willing to take the cigarettes.”
