March 29, 2024

Generation change and rising inflation will accelerate bitcoin adoption

Generation change and rising inflation will accelerate bitcoin adoption

The era of globalization is coming to an end and is being replaced by an “age of disorder,” the largest pollster suggested.the amount of assets of a financial conglomerate in GermanyDeutsche Bank. The company believes that in the coming years the state of affairs on the international arena, public opinion and other aspects will change. All this to one degree or another can accelerate the recognition of bitcoin and other cryptocurrencies, writes RBC Crypto.

Deutsche Bank predicts that inflation will rise significantly in the coming years. Central banks will continue to print money to combat crises and surging debt.

Injecting liquidity into markets and the economywill lead to a gradual depreciation of national currencies. Such a policy will play into the hands of Bitcoin and other cryptocurrencies, says Anatoly Knyazev, co-founder of EXANTE. BTC emission is limited to 21 million coins, and their mining speed (bitcoin mining rewards) drops every four years thanks to halving. This makes the main digital coin inflation-proof.

"The current position of central banks on infusionliquidity in the economy will undoubtedly be reflected in asset values. Probably, this situation will globally lead to higher inflation, lower value of money and the growth of stock markets. Without a doubt, cryptocurrencies will enter the top 3 most popular financial instruments ", - Knyazev is sure.

The head ofBinance representative offices in Russia and the CIS Gleb Kostarev. From his point of view, the growth of the money supply and inflation will increasingly cause distrust of the traditional monetary system and fiat currencies.

Deutsche Bank thinks influence will increasethe younger generation on the state of affairs in society. Millennials and younger people will catch up with their elders by 2030, allowing them to have more voting power in democratic elections. Probably, a gradual increase in the proportion of young people in society will positively affect the recognition of cryptocurrency.

For example, Ruchir Sharma, global strategist and head ofEmerging Markets Bank Morgan Stanley said in an interview with CNN that stimulus measures are pushing investors to seek alternative assets to build capital. At the same time, the younger generation is increasingly choosing bitcoin over gold.

Knyazev added that cryptocurrencies respond to key queries of the modern generation. These include:

  • lack of regulation;
  • not subject to governments;
  • controlled inflation (in the case of bitcoin);
  • anonymity.

“Generation change is a powerful resource for change. The new generation will undoubtedly change the investment landscape compared to the previous generation - even now bank deposits are losing their attractiveness and giving way to brokerage accounts ", - says Knyazev.

But there are also negative prerequisites. Deutsche Bank suggested that the coming era could negatively affect the stock markets. If the period of globalization was remembered for the record cumulative growth in asset values, then the “age of disorder” threatens current global estimates.

This state of affairs can be unfavorablefor the cryptocurrency market, noted Nikita Zuborev, senior analyst at Bestchange. During the current crisis, digital assets have shown a high correlation with the stock market, and this may remain in the future.

“The market is already showing a strong correlation betweencryptocurrencies and stock markets, although there is no direct relationship. Therefore, we have assumptions that the crypto market will continue to react to current events in about the same way as traditional markets - if the financial crisis continues, the cryptocurrency may suffer no less than the stock market ”, - warned Zuborev.

He clarified that on the recognition of digital assetsDeutsche Bank's projected de-globalization could also be negatively impacted. Cryptocurrency was conceived as a decentralized currency outside the government of any country. If the trend that began with the onset of the pandemic continues, and countries increasingly close themselves off from each other in the economic aspect, then the idea of ​​a new world currency will become less relevant.

Kostarev, on the contrary, admitted that the processglobalization will only accelerate. The coronavirus pandemic has helped companies adapt to telecommuting, making state borders less meaningful. This is beneficial for cryptocurrencies.

“Cryptocurrencies are the next step inglobalization. And despite the fact that the coronavirus has temporarily slowed down this process, globalization will not go anywhere, but on the contrary, it will only accelerate. Indeed, it was during the coronavirus period that many companies began to practice remote work, which means that the link to a particular country is becoming weaker, because you can work remotely from anywhere in the world. ", - said Kostarev.

He stressed that even the presence of positiveprerequisites for the recognition of cryptocurrencies does not mean that you can bet on bitcoin. It is difficult to predict which digital assets will gain popularity and will be in demand among the audience. The market is still very young and is only at the beginning of its journey. Knyazev agreed with this point of view and proposed to consider not only BTC for investment purposes, but to look for other, promising projects.

“Bitcoin is the blue chip of cryptocurrency,which will get all the growth benefits of cryptocurrencies. However, it is likely that over time, other more promising projects will come to the market. Therefore, when buying cryptocurrency for an investment portfolio, you need to think about which projects can complement it, and which ones should be disposed of ", - advised Knyazev.

He added that the projected Deutsche BankThere is another threat to cryptocurrencies in the future - central bank digital currencies. If there are any, it could move Bitcoin and other coins into the commodity category. This is possible even in countries where cryptocurrencies have already been legalized as a means of payment.

In March, analysts from one of the oldest crypto exchangesUS Kraken predicted bitcoin price rise to $ 700,000 by 2045. This will happen thanks to the change of generations. In the next 25 years, young people will receive national wealth, part of which will be invested in cryptocurrency.

Generation change and rising inflation will accelerate bitcoin adoption

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