FIAT currency is any currency established as money by governments but does not have intrinsic value. Simply put, it is not backed by any asset.
China’s digital currency is ramping up and that means that Chinese looking to continue transacting in the shadows may have to enlist alternatives such as cryptocurrencies.
She discovered that she can use bitcoin to top up people’s phones on bitrefill.com, and she can charge for this. For every 100 dollars she receives in bitcoin, she gets 120 CUC in cash from her friends whose phones she tops up. Ira is quite pleased that she has found a way to arbitrage the currency exchange. If she got paid via Western Union, she’d lose 15% of what the agency pays her. This way, she makes 20%.
The scope of this article is to analyse Bitcoin (BTC-USD) position in monetary economics and as a mean of fiat currency hedge. Despite critics arguing that Bitcoin’s value will eventually go to zero, I find that economic projections favour Bitcoin as a store of value as opposed to fiat currency. I run three scenarios to evaluate possible Bitcoin’s price in the short term. Following the analysis, the projections show a price range between $5000 and $57000.
Many people tend to forget one thing today: Fiat money is not as stable as it is perceived – Germany alone has had four different currencies in the last 120 years. In contrast, Bitcoin could offer the stability and assurance that other currencies fail to provide: