Changpeng Zhao is the 44-year-old CEO of cryptocurrency exchange Binance. He recently became one of the world’s wealthiest people. Having a net wealth of $96.9 billion.
This net worth, however, could be underestimated. It is because it excludes his cryptocurrency assets and Binance’s token. Additionally, Binance coin (BNB) has lately been in the $500 per token range.
Who Prohibits it?
When you add all of this to Zhao’s net worth, he may be the wealthiest person on the globe. With the exception of El Salvador, practically every country, notably China, Russia, Indonesia, and India, prohibits the use of cryptocurrencies as fiat money or legal currency.
Governments and authorities are confused about how to handle it in general. It’s no surprise, then, those virtual currencies have elicited a range of reactions from authorities and governments. Investors are at a loss as to whether or not to venture into cryptocurrencies.
Evidently, on the prospects of cryptocurrencies, many people are prepared to stake their money. Worldwide, there are 100 million Bitcoin users and 53 million trades. Americans owned 22% of BTC. Per the different reports, there are 400 million virtual currency investors in India. The total market capitalization of cryptocurrencies is $2.1 trillion.
Currently, Bitcoin has a market share of approximately 40.2 percent, while Ether has a market share of 19.9 percent. In just 13 years, the market’s capitalization has risen from nothing to $2.1 trillion.
What Happened?
Bitcoin was launched on January 3, 2009. It is the first cryptocurrency. The sub-prime crisis had imposed a tremendous toll on global stock markets. Adding the economies at the time. It was a critical phase in global markets.
Additionally, the weaknesses were exposed on highly-concentrated financial systems. Of course, in the aftermath of the subprime crisis, numerous governments opted to handle the crisis. This happens by manufacturing bills and spending their way out. This resulted in multi-decade rampant inflation across several nations.
COVID Impact
The COVID scenario prompted governments to increase their printing. This movement is to combat the pandemic and prevent their economies from collapsing. Inflation in the United States, for example, is at 7%, the highest level since 1982. Even though the Indian government hasn’t been creating money or spending to prop up the economy, consumer price index (CPI)-based inflation was 5.59 percent in December.
During the last two years, it created and circulated more than 40 percent of the world’s currency. You are losing money every day if you aren’t investing in an asset that outperforms inflation.
Over 20,000 cryptocurrencies are in circulation. Actively traded are about 2,000. In this case, the rise of Bitcoin is significant. It’s also necessary to consider the remaining 18,000 people who are struggling financially. Central bank-controlled global currencies offer a wide range of applications. Bitcoin, on the other hand, is more like gold or diamonds because it has a limited supply (21 million) and hence commands a premium price.
In a recent paper, Goldman Sachs, which reopened its cryptocurrency desk in 2021, estimated that Bitcoin would overtake gold in 2022. On the other hand, all cryptocurrencies do not have a finite supply. Some cryptocurrencies, such as Ether, have an endless supply. However, there is a limit of 18 million every year.
Are Regulators Uncomfortable?Â
There is no central authority over a decentralized and virtual currency. It is open to investors from all around the world. Also, the demand-supply issue is handled by the current network and protocol. This movement involves millions of individuals. As a result, a third-party regulator is unnecessary.
There is no way to increase or decrease virtual currencies. This is because all authorities and governments have lost control. Only force their way out of a financial crisis or a pandemic emergency. Regulators and the government are both concerned about the lack of oversight.
Cryptocurrency Emergence
Regulators and governments must take this growing technology into account. The fact that millions of individuals are willing to invest in it determines its value. Shells, stones, and gold all became “standards” at different times. For a long time, manufacturing currency notes has been based on gold. Not unlit the latter developed its own “standard.”
As a result, the 13-year-old bitcoin market requires room to develop in a controlled manner and operate on its own. And anyway, a teenager requires room to mature and mature into an adult. Of course, having an adult (the regulator) keep an eye on things is beneficial.
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