The crypto community claims that it makes sense to buy Bitcoins because ordinary money will worth less and less because of all the trillions that central banks pump into the financial system. Is it really so?
In mid-May, despite the impact on the financial market caused by the coronavirus pandemic, there was a very important week for Bitcoin. We’re talking about a new halving when it comes to mining of this cryptocurrency. Bitcoin passed its third halving quite peacefully, so the moment after that, it was worth a little more than 9,000 U.S. dollars.
What does that actually mean? Now it’s harder to mine bitcoins, so their total number is even smaller, meaning the reward is half as small. Miners were rewarded with 6.25 bitcoins for each newly created block (previously 12.5). That is why it’s now more difficult to mine new bitcoins because the supply is limited, which should be reflected in the constantly rising price.
The opposite thing happens with the currencies of individual countries. Many central banks, in an effort to prevent a severe recession, tirelessly print dollars, euros, pounds, yens… The crypto community, therefore, claims that it makes sense to buy Bitcoins because ordinary money will worth less and less because of all the trillions that central banks pump into the financial system.
Are You Suspicious of Bitcoin?
Consequently, sooner or later, there will be a general rise in prices. In this case, Bitcoin would be similar to providing protection against inflation that was once provided by gold, which is why some reputable investors have recently started buying bitcoins.
The huge action of the United States, as well as other governments and central banks around the world, has caused fears of inflation and accumulation of debt out of control. However, investors have turned to dollar security since the corona crisis began.
Bitcoin, as well as other digital currencies whose supply has been programmed to shrink until they reach their maximum, seems like…