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(Kitco News) New research points to a connection between emerging markets and increased interest in crypto, putting into question comments by some Federal Reserve officials that bitcoin is no threat to the U.S. dollar.
Global stock charting platform TradingView released new data showing that underdeveloped countries are choosing bitcoin as a safe asset.
What might have been gold or U.S. dollar in the past, now it is the crypto world that is offering safety to investors from more unstable regions of the world, TradingView general manager Pierce Crosby told Kitco News.
“What this research had identified for us is that the uptick in interest in emerging markets for cryptocurrencies signifies that there are big questions about the price stability of various fiat currencies, and people are worried about their own financial futures,” Crosby said. “What they are doing, as a result, is looking for a natural hedge to those assets that are either unstable or are seeing a lot of potential inflationary headwinds.”
This is a really compelling connection that TradingView did not see even six months ago. A lot of it has to do with currency debasement fears that are rising on a global scale.
“When some countries discuss the idea of printing a ton of money, it is basically a detriment to the existing holders of that currency. We see it in the U.S. as well,” Crosby said.
But places like Cuba reveal the true extent of it, he noted.
“Cuba is the only country in the world where over half of all inquiries (50.4%) were made about cryptocurrency assets, an increase of 12.2% on last year,” TradingView’s research said. “Libya (42.2%), Ukraine (41.9%), and Palestinian Territory (38.7%) all feature in the top five, while the Syrian Arab Republic (36.9%) is tenth, suggesting that countries with high levels of instability are proportionally more interested in digital assets than more developed nations.”
This indicates that people are worried about their money “being blown away” by either inflationary pressure or general volatility in a given country, Crosby added.
The increase in crypto searches also coincides with what is happening in a particular country at a given time.
“Recently, we saw a lot of activity around Myanmar, which correlates with the fall of a regime. If the military is taking back control of the government, it is a huge threat to the actual currency. People are looking at cryptocurrencies a lot more, and we happen to be the provider of the most robust data,” he said.
TradingView is not a brokerage firm. It is a provider of crypto-asset prices across the world. Crosby said the surge in bitcoin this year has contributed to TradingView becoming the 83rd most popular website globally.
“People are finding ways to invest, and we are just the best way…