1. PixelPlaygroundHome
  2. Metaverse Insights

Why Bitcoin and Fiat Currency Are Related

• Metaverse Insights • 73 views

In the past decade, Bitcoin has achieved significant success and development. Si

Why Bitcoin and Fiat Currency Are Related

In the past decade, Bitcoin has achieved significant success and development. Since 2009, Bitcoin has entered mainstream society, being widely accepted and recognized as one of the most valuable applications in the world. It has also gained support and recognition from traditional banks, securities companies, and other institutions. However, with the advancement of technology, Bitcoin has also encountered some problems. These drawbacks have led to price fluctuations and a lack of effective control, resulting in an increased dependence on Bitcoin. Why is Bitcoin related to fiat currency?

Firstly, we know that fiat currency is not a commodity like gold or silver; it is cash or other forms of assets or property. Therefore, if something that can replace another item is used to measure its effectiveness, it is essentially a mortgage of national debts (such as the US Treasury and central banks of other countries) – this is very important. Secondly, Bitcoin is usually used as a means of payment because it is based on blockchain technology, making it a digital currency. However, it cannot be transacted using physical documents.

The last factor is that we are currently in a world of encryption: the era of the digital economy is impending. All of this is driven by computers. And this new thing is creating new possibilities, such as how digital gold will change the functioning of human society. Furthermore, more business opportunities may emerge in the future. As more investors recognize the importance and potential of Bitcoin, I believe this is an area worth paying attention to.

Relationship between Bitcoin and Fiat Currency

According to bitcoinist, based on data from the International Monetary Fund (IMF), the relationship between Bitcoin and fiat currency is “positively correlated.” When people compare gold with fiat currency, they generate opposite exchange rates. If people price in US dollars, they would buy BTC or other cryptographic assets. In the past two years, both of these assets have been rising while fiat currency has fallen by around 80%. However, in the recent price rebound, this ratio has noticeably increased. Although the ratio between the two has been steadily decreasing, it may gradually increase over time.

This article and pictures are from the Internet and do not represent Fpips's position. If you infringe, please contact us to delete:https://www.fpips.com/24506/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.

Like (0)
Previous 08/17/2023 06:53
Next 08/17/2023 07:16

Recommended articles