2 Reasons Why Bitcoin Will Continue Receiving International Capital Inflows

This stability is due, at least in part, to an increase in transaction volumes and investments in the cryptocurrency. While some would argue for a long-term adoption cycle, others point to a host of difficulties globally that will keep the capital influx moving.

So much happening in the world right now.

– Hong Kong's autonomy in question
– Italy looking to tax savings
– German 10-Year Bund trading @ -0.24%
– US + China trade war rages on
– Fed about to cut rates

Can you see the wave of capital flowing into BTC too?

— Marty Bent (@MartyBent) June 12, 2019

While a number of issues exist, they can be divided into two categories — political and financial. Neither is encouraging, and both are driving investments in Bitcoin.

Political Unrest

The international political scene is confusing and scary for many consumers and investors. While there is some semblance of stability in certain regions, others are in turmoil. The recent demonstrations in Hong Kong over its autonomy have revealed a deep-seated rift in Chinese politics. The largest economy in Asia, China has also seen slipping profits, as well as banking failures in recent months. This, along with potential trade war talks with the US, has created chaos in Asian markets. What’s more, the tenuous stability of the Middle East remains in question. The recent attacks on oil tankers in the Gulf of Oman have heightened tensions between Iran and Western powers. These reasons, along with political instability in the US and Europe, have led investors to pursue safe-haven assets like Bitcoin and gold. Political unrest is notoriously bad for investments, and many are seeking markets where government control is limited.

Financial Instability, Bitcoin Longevity

A host of financial issues have also cropped up globally. For example, the German 10-year bond offering at a historic low point of -0.24 percent has been widely seen as a sign of European financial collapse. Additionally, the decade-long US economic freight train has come to a near-standstill. Financial analysts suggest that the Federal Reserve (Fed) will be forced to lower interest rates at least once this year — likely twice. The decision is linked with lackluster economic performance and dangerous inflation numbers. As government-linked assets continue to destabilize and fiat currencies come under fire, Bitcoin gains more relevance. Because of its decentralized structure, the cryptocurrency offers investors a store of value (SoV) that is not connected to government involvement.

Continued Movement

Of course, economic cycles happen. The growth over the past decade and the general financial stability must come to a halt at some point. However, observations of that cycle prove that during times of duress, investors move into stable assets. This has been made abundantly clear with the increase in gold prices over the past month. The stability of Bitcoin during that same period shows that many investors perceive Bitcoin as a similar SoV asset. Taken together, the political and financial unrest facing investors appears to be driving capital into Bitcoin As these issues are only beginning, the desire for such assets will only increase. Do you think Bitcoin’s price will continue to rise as political and financial instability increases? Will the market reject Bitcoin in favor of other assets like gold? Let us know your thoughts in the comments below!