Is Bitcoin and cryptocurrencies here to stay, or will they fade away? This is a question on the minds of many interested in the field of digital currencies or what can be called alternative economics, especially with the recurring crises that this industry is witnessing, and the continued rise in interest rates by the US Federal Reserve to combat inflation, which has had significant negative effects on financial markets.
Brad Garlinghouse, CEO of 'Blockchain' and digital payment 'Ripple', answered this question in an interview with Bloomberg when asked about the future of his company in its struggle with the U.S. Securities and Exchange Commission that began about two and a half years ago.
Garlinghouse confirmed that he is optimistic about the future of cryptocurrencies as a whole, but he appeared cautious by saying, 'It is difficult to predict where cryptocurrencies will end up after the global regulatory actions that this industry will witness in the near future, but I know that these currencies are here to stay and will continue to grow.'
Recovering losses and achieving growth.
Regarding the banking crisis and its repercussions on digital currencies, he said, 'If we return to the white paper of Bitcoin, written by Satoshi Nakamoto - the person believed to have founded and developed Bitcoin - we will find that this currency emerged from the pains of the banking crisis in 2008 and 2009.'
Garlinghouse pointed out that after three major crises faced by the cryptocurrency sector, starting with the collapse of the 'Terra Luna' currency, the collapse of the American 'FTX' platform, and finally the crisis of the banks linked to this industry, and although these digital assets are always viewed as high-risk assets, Bitcoin managed to rise to a price of $28,000 again and recovered its losses.
In a report published by the French newspaper 'La Tribune', writer Jeanne Dussouy stated that digital currencies thrived during the COVID-19 pandemic, reaching a market value of $2.3 trillion. However, the enthusiasm for digital currencies, which are now considered an alternative investment, is fueled by the crises and disruptions in the traditional economy, which represents a source of concern for governments.
Here to stay or will they fade away? Experts predict the future of digital currencies.
"Stablecoin": is a type of cryptocurrency that seeks to maintain price stability.
Enthusiasm for digital currencies continues to grow, as they are now considered an alternative investment fueled by the crises and disruptions in the traditional economy (Getty).
A way to receive assistance
Since the early hours of the Russia-Ukraine conflict, the Ukrainian government has opened accounts and digital wallets to receive donations in Bitcoin and others.
from digital currencies. Several famous figures have made donations, such as Jack Dorsey, founder of Twitter.
The uses have multiplied
Since its creation in the aftermath of the financial crisis in 2009, Bitcoin has tried to break away from the image of a volatile and speculative digital asset.
Recently, non-fungible tokens (NFTs) have emerged, starting to invade the virtual worlds of brands or what is called the 'Metaverse'. These brands are seeking to create new payment systems in the Metaverse through stable digital currencies backed by the dollar or another currency that allows for instant and secure exchanges without intermediary costs.
Therefore, regulators around the world are working to control this digital wave, if not contain it. The writer identified six trends that are pressing on the pace of cryptocurrency regulation worldwide.
Inflation fuels the search for alternative investments.
The world is facing inflation rates not seen in decades. As a result, central banks, led by the Federal Reserve, have begun to implement tight monetary policies, most notably increasing interest rates, especially on government bonds. In this situation that creates uncertainty, investors are seeking safe havens from inflation, one of which is digital currencies.
Increased reliance on digital currencies in savings.
The popularity of digital currencies cannot be denied; in France, 8% of the French have already invested in digital currencies, according to a study conducted by KPMG, and Russia leads the world in the use and mining of digital currencies, especially in Siberia, where digital currencies have become a major source of income for many Russians.
Since its creation in the aftermath of the financial crisis in 2009, Bitcoin has tried to break away from the image of a volatile and speculative digital asset.
Recently, non-fungible tokens (NFTs) have emerged, starting to invade the virtual worlds of brands or what is called the "Metaverse". These brands are seeking to create new payment systems in the Metaverse through stable digital currencies backed by the dollar or another currency that allows for instant and secure exchanges without intermediary costs.
Ending the dominance of the dollar.
While waiting for the easing of sanctions on Russia, the government is intensifying its efforts to support the ruble and reduce reliance on the dollar. The idea of accelerating work on a digital ruble, which falls under the category of central bank digital currencies, has support in Moscow. While Europeans are seeking to pressure Russia by reducing oil and gas demands, Moscow has resorted to imposing payment in rubles, and Bitcoin may depend on this in the future, according to a statement from a Duma official. There is also the 'Petro' project in Venezuela, a digital currency backed by oil prices.
