There is no such thing as perfect timing, it boils down to time in the market
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Is there ever a right time to invest in Cryptocurrency? In hindsight, of course! But going forward it is like almost anything in life – uncertain.
There is no perfect time as to when to invest in Cryptocurrency, however just like the forex market it's so often not about timing the market but about time in the market.
Once you understand the role Bitcoin and Cryptocurrency can play compared to the current economic environment you will understand why you should consider holding Bitcoin, even just as a hedge.
Issues with the current economic system
The lead up to the creation of Bitcoin is outlined in my Money blog, which you can read first if you prefer. Bitcoin was created due to significant and concerning issues with the current monetary system in place and is a viable option to provide an anti-inflationary store of wealth.
Currently we are fighting against economic instability, rising inflation, stagnant wages, stunted economical growth, and heavily corrupted/corruptible overseeing bodies, corporations and governments. Bitcoin might be 10 years old, however it is still at the early stages of development and mainstream acceptance.
World wide debt is increasing rapidly
Today we face an uncertain economic future.
World wide debt is spiralling almost out of control, governments are spending and printing more money, wages for the wealthy a rising while the poor and middle class are stagnating. The USA owes $22.5 trillion, Japan $12 trillion, UK 3.5 trillion, India $2.8 trillion to name just a few countries – in total, global debt is now $246.5 trillion as at the end of the first quarter 2019.
The World Bank and International Monetary Fund is encouraging all countries to move to negative interest rates and to limit cash transactions by both individuals and businesses. Already some shops show signs stating cash not accepted. In Sweden for instance, only 15% of all transaction involve cash and some banks there no longer accept or dispense it. In China QR codes have been thoroughly embraced.
The world is going digital. People want instant access to purchase products and services as well as ease of access. The current banking system is trying to provide this, however it is operating from a flawed standpoint and most importantly of all, is centralised and therefore easily corruptible.
Cryptocurrency – a possible solution to a Big Brother world?
Cryptocurrency does offer a solution especially when considering that many of the original issues that caused Bitcoin to be created have not been dealt with, as well as the Big Brother aspect of online banking.
Privacy, regardless of how open you are, is still important. Do you get irritated by feeling like every movement, search and sometimes even thought is followed, tracked and marketed towards? I know I do. I may choose to watch a television programme while I work or do household tasks. Later I notice snippets from that programme are being offered on YouTube. Or I discuss (discuss – not search online!) getting a new vacuum for instance with my husband – and then I suddenly am inundated with vacuum adverts. I must admit this is a huge factor in why I love using the Brave browser now. It really helps in preventing a lot of the tracking and targeted advertising.
Negative Interest Rates
Negative interest rates are being encouraged. From the World Bank website (page 5) “Negative deposit rates should provide some encouragement to banks to buy alternative assets” and from page 6 “they can boost consumption and investment” but also admit “negative nominal interest rates may have undesirable side effects on financial stability and capital market functioning.” These negatives to having negative interest rates may include
- Less profitability for banks (who then pass on fees to customers)
- Pressure on non-bank institutions (eg pension or life insurance funds)
- Ambiguity in valuing assets and liabilities
- Excessive risk taking to get better return
All of which will encourage people to keep their cash outside of the banking system. This could potentially see a massive uptake on alternative investments such as Cryptocurrency, Gold, Oil to name a few alternative stores of value.
Why intervene to limit cash?
To prevent people from moving wealth outside of the banking sector (and away from their control), they are also encouraging a move to limit cash transactions. Many countries now have penalties imposed for using cash in excess of a certain amount. Some examples of countries currently operating with a cash limit in place include
- France and Spain – 1,000 Euros
- Greece 500 Euros
- Italy 2,999.99 Euros
- Bulgaria 5,110 Euros
- India 20,000 Rupee (currently equivalent to $278 USD)
Numerous countries are considering implementing cash restrictions in part due to recommendations from the IMF including Russia and Australia. Punishment for not complying ranges from hefty fines through to significant jail terms.
Fast and cheap – Technology is great!
Moving to online based transactions is a good thing and provides certainty in payment, ease of access, fast and cheap transactions. However the intrusion and monitoring that follows is invasive and concerning. Could you imagine if World War 2 happened in the current environment? If an entire section of the human race were determined to not deserve access to a bank account? This is not an exaggeration. People are already being limited in their banking access and alternative living options all around the world. How much harder would life be if using cash were not an option? If everything went through the banking system, you had no control over your personal data and no choice in charges or fees? You don't have to be a science fiction reader to understand how dire things can develop – well intentioned or not.
No easy solution
There is no easily recognisable solution to the current economic instability. No one knows what the future will bring. However we as people should have the freedom to pay for goods and services in a way that suits us, free to save with cash, cash in on jewelry, barter or use online or other transactions.
The current push for a cashless world wide society where people are stuck in a banking system that monitors and controls your spending, is bordering on fascism and it will be fascinating to see what happens next with the ever increasing debt and economic situation world wide.