USD, EURO, BTC | Who is going to make it?

19 April, 2022

Any news from the world? A lot, and they do not sound promising.

Let’s start with Lebanon who has declared bankruptcy at the beginning of the month. Followed by Sri Lanka that a few days ago did the same by declaring that they will not be able to address their debt, making the State bankrupt “de facto”.

Of course many will think: “Who cares about Sri Lankan Rupee”, “It is not happening to us, so this will not touch me or my everyday life”, “Not my problem if Sri Lanka is bankrupt”. But this way of thinking it’s the same as hiding behind a finger. Because the weakest currencies are the first one to fall, and all the other fragile currencies, with the actual world situation, are cursed to have the same fate.

Sri Lanka’s Ministry of Finance, has declared openly that the effect of Covid-19 Pandemic and the ongoing war in Ukraine have for sure accelerated the all process, making them unable to fulfill their debt obligations. But it should be also noticed that Sri Lanka’s (non)politics are part of the problem. Few huge mistakes have been made by this country that is clearly “NOT too big to fail”. 

First they did not diversify and neither changed/improved their way of growing and did not ensure to stabilize new exchanges that could have enriched the country. Taxes are not paid by most of its citizens and in most of the cases they are so little, and with not differentiation between rich and poor, that they could not change the overall ongoing situation. And last, but not for importance, the complete reliance on tourism, that after Covid-19, has put the country on its knees. It is transparent, unfortunately, that these poor decisions have not made Sri Lanka ready for what happened in 2020 with Covid and what is happening now in 2022 with inflation soaring globally. These decisions and inflation’s repercussions have made Sri Lanka the weakest link.

Is this maybe a sign or a consequence of a wider scenario that has been in motion already for the last couple of years? For sure what we are witnessing today has not been helped by the decisions taken by Central Banks and especially by the American Federal Reserve who kept printing money for stimulating the American economy during the Pandemic? 

I believe and agree that Reserve’s role should be to reinforce the global economy making sure that people will not undergo inflation periods, and by assuring that exchange of goods and execution of business will not slow down.

But it cannot not be noted that by putting into circulation new money without any restriction or limitation, has brought to what we are witnessing. The decline of reserve currencies which is pushing investors and normal people to research for different stores of wealth.

Maybe one day, not too far from today, we will wake up to the fact that one of the weakest currencies has become Euro. Keep in mind that the Euro is falling, and soon it might even equal or lower the US dollar, for the first time in the last two decades, and this will be a big problem for the whole Schengen Area, for its businesses and activities with the rest of the world. If the Euro will fall, right after we might see the Dollar become the weakest in circulation. 

Try now to imagine a weak Dollar competing with something like Bitcoin (a deflationary asset, defined so because of its scarcity), the result can only be one, because despite the two are both mediums of exchange but with completely different properties, the one currency that is inflationary by nature (USD) will not be able to keep up with the demands and duties that should be accomplished when used.

I hope that this is just the most pessimistic view, and maybe Lebanon and Sri Lanka will remain two isolated cases, but the aim of thinking the worst is also to push you to foresee and research about what happened and what might be happening, realizing that something is going on, and if what has been discussed above will happen with your currency, there is only one question left:

“Do you already have or are you thinking about a Plan B?”

Most critics about Bitcoin and crypto in general will say that cryptocurrencies supporters are gloating about the situation, but this is not true because when a government is going bankrupt or a currency lose its value, it will mean only problems for its average citizens, and how is it possible that we will wish for this? 

If Central Banks would have implemented policies that would have preserved the value of money, making it deflationary to start, maybe we would not even need to have something like Bitcoin. This is what Bitcoin supporters have been preaching for the last decade, not the failure of Governments, Central Banks or Reserve Currencies, but the concerns and issues that might arise by the destabilization of the current value of money, and that unfortunately we are already starting to perceive.

People in general are unsatisfied by the economical and political situation surrounding them. The actual system is not trusted, and it seems that we are slowly shifting from a dollar-based world to a digital currencies world.

Bitcoin can be the Plan B for Billions of people that are already suffering and it is guaranteed that they will continue to struggle from the decadence of governments. What will be a real game changer in the future ahead of us? Having something that is a medium of exchange and at the same time is also a store of value, i.e. Bitcoin.

Be alert and prepared, don’t stop studying, discovering, educating yourself about  what is new around you, because the world is changing and we are about to change with it, whether we want it or not, so at least let’s be ready. As I like to say at the end of every article:

“The Future is Bright, and it’s just around the Corner” … Let’s take it!

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