Cryptocurrencies and the Middle East

On Wednesday, Bitcoin’s price reached the highest level in seven weeks. This happened early on January 8 during the Asian trading hours. Bitcoin is one of the most famous cryptocurrencies around the globe. Moreover, it is the biggest cryptocurrency in terms of market capitalization.

The price of the biggest cryptocurrency reached this result as Iran launched retaliatory attacks on the American bases in Iraq. Moreover, gold which is a classic haven asset surpassed more $1,600 for the first time since 2013. Also, other anti-risk assets such as Japanese yen, Swiss franc and U.S. bonds strengthened their positions.

Bitcoin is often referred to as the safe-haven. The latest conflict in the Middle East once more underlined its importance.

Cryptocurrencies and international organizations

As mentioned above, cryptocurrencies such as a Bitcoin became more important for the financial markets. However, it will take a while until cryptocurrencies will be able to compete with the U.S. dollar.

According to Gita Goripanth, who is a chief economist of the International Monetary Fund, cryptocurrencies lack the infrastructure and global acceptance. She became the chief economist one year ago in January 2019. Goripanth mentioned that cryptocurrencies are offering interesting possibilities. However, due to the fundamental issues, it won’t be able to challenge the dollar’s status.

She stated that the dollar is supported by the rule of law as well as the other factors such as investor protection etc.

However, other prominent economic figures believe in Bitcoin and its ability to challenge the dominance of the U.S. dollar. The governor of the Bank of England Mark Carney suggested a central bank digital currency (CBDC) backed by a basket of reserve currencies could support national economies.

Moreover, the People’s Bank of China announced that it plans to launch digital yuan as it was close to complete this long-awaited project.

Bitcoin is the biggest cryptocurrency, and it has the opportunity to attract investors who are willing to diversify their portfolios.