The cryptocurrency market is ever-growing and not showing any signs of slowing any time soon. Part of the reason is that it has seemed to have made quite an impression on newer generations. The possibility of having available currencies not directly tied to any economy is very captivating. They do not even have ties to any physical assets; it is completely digital. This is very rare to see in the modern-day and age. However, as the world becomes increasingly digital, this is the direction most people expect currencies to go in. It only seems natural to most individuals. Therefore, in this article, we hope to explore some of the areas where one can already see the influence of cryptocurrencies.
Legal acceptance of cryptocurrencies
For one thing, cryptocurrencies are becoming increasingly acceptable to governments worldwide. Most countries have already accepted them as legal tender. Although you should be aware that you still cannot use them in most places, especially physical locations. This is more due to the choices of private establishments.
Countries across Europe have been encouraging the growth of cryptocurrencies associated with blockchains, partly through legislation. These countries have taken up a relatively non-regulatory stance, and have let the market grow by itself. Switzerland, for example, is keeping an eye on the sector and is slowly setting up legislation to accommodate them. Countries like Germany have even gone as far as to include VAT on cryptocurrency payments, but they have also mentioned concerns over various aspects of the crypto market.
The market is highly volatile, however, so some countries are bringing in more regulations to keep it under control, some outright banning it. China, for example, had initially been very laissez-faire with the sector. However, they soon saw a worrying amount of liquidity leaving the country and quickly set up very strict regulations on any crypto trading. Countries like Bangladesh have outright banned trading cryptocurrencies whatsoever.
As we can see then, there is a whole range of attitudes by governments all over the world. Some have a positive, but slightly concerning outlook. These countries have let the market do what it pleases, but are slowly creating laws around it as they become aware of how it functions. Some still outright dismiss the idea, fearing what it might do to their economies. Generally speaking, though, Europe seems to be the optimal area for cryptocurrencies, where the most growth is happening.
Use as safe-havens
The fact that cryptocurrencies are not directly to world economies is a great tool for traders. Just because cryptocurrencies do not have direct links to world economies, does not mean they are not affected by them. They have increasingly become targets as safe-havens for investors. Let’s say there is a recession. As world economies struggle and traditional currencies quickly devalue, cryptocurrencies are becoming a primary choice for investment.
This is not entirely theoretical either, as we have already seen such events occur. In the US-China trade embargo, earlier in 2019, many traders flooded into the Bitcoin market. However, the recent history of Bitcoin has been a bit less promising during the coronavirus crisis. We should keep in mind that while cryptocurrencies are safe-havens if too many people flood in at once, the currency could devalue. This is why no one cryptocurrency should act as a safe- haven, but most likely, investors will have to search out for new safe-havens when during economic hardships.
The media’s acceptance of cryptocurrencies
If you want to find out the general, mainstream, opinion on cryptocurrencies, the media is the place to look. The media quite often reflects the attitude of newer generations and is as such a useful tool to understand modern attitudes.
There are plenty of social media platforms out there that can quickly inform you of people’s opinions on cryptocurrencies. There are innumerable internet forums out there that can quickly inform you of what people are thinking. Reddit, for example, has quite apparently become a hub for crypto discussion. Some have even identified that activity there is tied to the performance of the crypto market.
We have even seen mention of cryptocurrencies in many movies and TV shows. Silicon Valley is a show that is almost entirely concerned with the new digital world. In one of the episodes, it mentions what is known as a 51 percent attack. The main characters in the show take control of 51 percent of all mining on a particular blockchain. After this happens, they hold a great amount of control over the network.