How Crypto Trends Affect the Economy and Vice Versa

How Crypto Trends Affect the Economy and Vice Versa

Cryptocurrency has been the next big thing in Fintech for almost a decade. And while the market has soared to impressive heights, compared to its value during its first few years. Cryptocurrency valuations are still rather small compared to their conventional tech company competitors. 

For example, Bitcoin’s total market cap (the value of every circulating Bitcoin, added together) is about $92 billion at the time of this writing. Meanwhile, PayPal Holdings is worth $107 billion. In many ways, these two entities are apples and oranges. PayPal is a corporation, while Bitcoin (BTC) is a digital currency. But at the very least, you can see that Bitcoin is pretty small when compared to the economy at large. So, what effect do Bitcoin and the altcoins have on the economy? 

Bitcoin’s Massive Influence in Today’s Economy

It could be said that Bitcoin’s effect on the economy has more to do with imagination than money. Bitcoin’s technology changes the way money can work, with altcoins being proof of this. Nearly any altcoin you can name is just a variation on the original blockchain ideas that Satoshi Nakamoto wrote about a decade ago. 

So, while Bitcoin might not be the most valuable network in the world, it’s certainly among the most influential. You practically can’t name a major corporation that hasn’t invested in their own blockchain technology in some way. Many others, like IBM, are partnering with existing public blockchains to speed up processes and save money for their shareholders. 

How Crypto Trends Affect
How Crypto Trends Affect

Little by little, blockchain is going to transform the way of business all around the world. It has already started to do so. International banks like PNC and Santander are using Ripple to make international transactions. The government of Canada is using Ethereum for data transfer and other processes. Bitcoin is accepted as a payment option for the largest e-commerce sites in Switzerland and Japan. All of this is proof that, though Bitcoin prices are lower than past all-time highs, Bitcoin and the altcoins are major players in the economy of the 21st century. 

Blockchain Jobs Are on the Rise

Another important aspect of the economy is jobs – who works for whom and what new jobs are coming into existence. At their most recent Devcon, NEO revealed that corporate heads and programmers were coming from Microsoft and Amazon to help them build the smart economy. Meanwhile, blockchain engineers are some of the most sought-after talents in the world, as public and private blockchains are trying to keep up with the rapidly advancing industry standards. 

Again, even though the altcoins are trading at lower prices than they were in early 2018, the influence of blockchain has never been greater. We can hope that because so many smart people have been hard at work for the past couple of years, the next crypto price bull run will be on a more stable foundation than the last. Crypto and blockchain are now, arguably, mainstream, and the flow of talent to blockchain jobs proves it. 

How the Economy Affects Cryptocurrency

This last point is a bit more uncertain. Many blockchain analysts wonder how an economic downturn would affect crypto prices. Would people losing money in the stock and currencies markets move into crypto for its decentralised and nation-agnostic approach to finance?

In the here and now, it’s clear that when large economic players, like the SEC in the United States, regulate in Bitcoin’s favor, this is a good thing for the whole market. Whatever happens to the larger economy, cryptocurrency is big enough that the conventional economy is starting to assimilate it. Tax laws, ICO regulations, and altcoin legislation are all becoming more transparent.

Bitcoin Cryptocurrency
Bitcoin Cryptocurrency

Global Economy 

In fact, we are already heading toward greater synergy between cryptocurrencies and the global economy. For example, where once forex traders would look at different currencies from around the world to create trading pairs, it is now possible to trade currencies such as the US dollar (USD) against Bitcoin. The BTC/USD forex pair is a new favorite of traders as BTC changes price much more dramatically than traditional currencies, meaning that there’s much to gain from sudden price changes.

So, the line between the crypto economy and the conventional economy has grown blurry. Just a couple of years ago, crypto was phoney internet money that people bought with their spare video game cash. Today, major hedge funds are starting to buy up Bitcoin by the thousand.

All of these signs and more indicate that Bitcoin is here to stay, and that the future of the altcoins may be equally bright. Not all cryptocurrencies will be winners, but it’s clear that certain projects will be a big part of the economy of the 2020s and beyond. 

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About Thiruvenkatam C

Served to the Nation for 26 years. Learned Digital Marketing, Web Development, Search Engine Optimisation, Online marketing, Online Advertisement, and Blogging while in extra hours. After voluntarily retired from Service Started own blogs and SEO marketing works. It's a hobby while in service, and now it's my professional second innings.

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