December 1, 2020

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Bitcoin will become a competitor of world currencies in May 2020 – economists say

2 min read
Bitcoin will become a competitor of world currencies in May 2020 - economists say

Over the past decade, central banks around the world have been unable to maintain stable inflation. Bitcoin can benefit from this and after the forthcoming halving, the BTC will have indisputable reasons to become a legitimate competitor to other world currencies.

 

Halving and econimists

In May this year, Bitcoin will expect to halve, with the miners’ remuneration will drop from 12.5 BTC to 6.25. Economist Peter C. Earle of the American Institute for Economic Research claims that this year’s halving will be in a particularly favorable situation.

This is because the Federal Reserve (FED), the European Central Bank and the Japanese Central Bank have not been able to create a favorable inflation rate, namely 2 percent per year. Current BTC inflation is around 3.6%. When the remuneration is halved, Bitcoin’s “inflation” will be lower than the Federal Reserve target.

British economist Daniel Lacalla claims that the Federal Reserve set a record in amounth of repos of $ 235 billion on December 25 last year. This amount is almost double the previous $ 133 billion set in July 2008 during the Great Depression.

 

 

Limited Bitcoin Offer

Bitcoin’s limited offer has always attracted investors and traders who are well aware of the impact of inflation on purchasing power. The limited number of coins that will exist keeps their original plan in line with a predictable and transparent protocol.

According to some economists and analysts, the known number of BTCs shows us its predictability, transparency and security. This will greatly contribute to its attractiveness in the future. Halving is expected to cause new price increases, but this is far from certain.

 

Summary

Unsustainable inflation rates and negative global interest rates predict that Bitcoin will become less speculative in economic terms. In the end, the BTC will be more credible than the traditional financial system.

 

File:World Inflation Rate 2019.png
inflation rates 2019 map

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