Let history be our guide.

March 2013: CNN

Bitcoin prices surge post-Cyprus bailout

“The situation in Cyprus has caused investors all over Europe to question the safety of the banking system.  The price of one bitcoin has popped 87% since Cyprus began discussing tapping deposits as part of the bailout by the EU and IMF. Bitcoins now trade at $88 each, up from $47 on March 16, 2013, according to data from Mt. Gox, the currency’s main trading exchange. That compares with just 5 cents per bitcoin in mid-July 2010, when Mt. Gox first started tracking prices.”

 

December 2013: Forbes

2013: Year of the Bitcoin

The article referenced a quote by Guillaume Babin-Tremblay, executive director of the Bitcoin Embassy in Montreal, Quebec, in reference to the parabolic annual price surge that saw bitcoin go from $20 to $1200.

“Babin-Tremblay said ‘Bitcoins were growing slowly until (the banking crisis) in Cyprus. Cyprus was the catalyst for the big increase in the price. The price started trading at about $40 and then doubled within a couple of days.’”

 

February 2017: Forbes

Why Venezuela’s Currency Crisis Is A Case Study For Bitcoin

“With the Venezuelan bolivar essentially worthless and supplies rapidly running out, Bitcoin is rising as an answer. According to Bitcoin brokerage Surbitcoin.com, the number of Venezuelan users skyrocketed, from 450 in August 2014 to more than 85,000 in November 2016.”

 

November 2017: Bloomberg

Bitcoin is the New Crisis Currency.

After bitcoin prices went from below $1000 to over $7000, Bloomberg mentions Zimbabwe’s effect on prices in the same way Cyprus was referenced 4 years earlier.

Zimbabwe, where the price of bitcoin spiked to double the international rate after this week’s military takeover, shows Jamie Dimon, Axel Weber and other cryptocurrency skeptics where the real-world use of bitcoin, and possibly its future, lies. It’s becoming the preferred way for residents of failing economies to transfer money without dealing with banks, protecting their savings from political turmoil, and avoiding the local currency when its value declines due to inflation.

 

May 2018: Yahoo Finance

Jim Rogers Interview

Whether artificially low interest rates around the world will lead to a bubble is up for debate. However, one respectable investor, Jim Rogers, co-founder of the Quantum Fund, recently said in an interview with Yahoo Finance:

“This (market crash) is going to be the worst in my lifetime.” He later said “they always start where we’re not looking. In 2007, Iceland went broke. People said, ‘Iceland? Is that a country? They have a market?’ And then Ireland went broke. And then Bear Stearns went broke. And Lehman Brothers went broke. They spiral like that. Always happens where we’re not looking.”

Whether these issues in Cyprus, Greece, Venezuela, Zimbabwe, and now Turkey are just isolated incidents relevant to only those living within their borders, or tremors foreshadowing larger crises, the fact remains that each and every one of them was accompanied by a Bitcoin price surge.

The demand and subsequent price hike begins at the local level and gradually spreads until, slowly but surely, prices around the world follow suit.

Why this happens is an entirely different and esoteric conversation rife with conjecture. But what is clear is the fact that Bitcoin has been the single best hedge each and every time currency has had an economic meltdownand currency meltdowns will never be a thing of the past.

 

Get in touch with us at info@jeffersoncapital.info

 

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