At the end of this month, bitcoin will have been in operation for 10 years. This financial and technological advancement has become one of the most important forms of currency, especially of late. However, a recent report published in Forbes suggests that the banks and financial services around the world could adopt a series of policies that would make bitcoin and other cryptocurrencies obsolete within the near future.
Arising from the Ashes
The 2008 financial crisis cost many their homes and put some banks on the verge of collapse. A lot of people became skeptical of financial institutions and lost their faith in banks to be able to act in a manner that would keep their money safe.
This was the atmosphere upon which Bitcoin rose. So many people were looking for a means to make money and pay for items apart from banks and from the standard currencies that they had used, and cryptocurrency looked to be the perfect option.
Is Bitcoin Threatened by Uncertainty
While banks have become more stable, the concerns that analysts have has not changed drastically. With the United Kingdom leaving the European Union, a trade war between China and the United States potentially on the rise, and many banks in Europe in danger of collapse, the need for bitcoin and other cryptocurrencies seems like it would be bigger than ever.
However, these currencies find themselves facing some of the exact same issues that banks are facing, which is as much about the current climate we find ourselves in as it is about economic strategies.
Writing on the current state of cryptocurrencies, Rebecca Harding explains that it is a combination of economic nationalism and trade wars that are leading to the economic climate we find ourselves in today. “The financial crisis globally has created a tide of populism” she explains.
This has not only been seen in the United States following the election of Donald Trump but has spread across Europe as nationalistic groups have also arisen.
As part of that movement, there is a greater call for banks and other financial institutions to be reformed. According to Harding, populism is led to financial reform as well, and this will likely mean that banks will have to change their policies and the means by which they do business if they are going to survive.
The most likely offshoot of that is that the need for cryptocurrencies will decrease as people become more confident in the currency of their own country. Bitcoin and other digital forms of currency rose specifically out of skepticism, but Harding feels that as people gain a greater sense of confidence in one’s own currency it will diminish the need for Bitcoin and others.
Regulation Could Kill Bitcoin
As populist movements continue to gain traction, this will also likely mean that government reforms over the cryptocurrency market will occur. These could even be created to make national currencies more stable, removing the advantages of Bitcoin.
While all of this is pure speculation, the fact that cannot be ignored that there is a growing concern in the digital currency market that a once-promising endeavor may be reaching its ultimate demise.
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