When it comes to investing in Bitcoins, it is often hard to sort the wheat from the chaff in terms of getting good advice about whether it is a good idea to invest in the cryptocurrency. Unless you have been living in the Outer Hebrides, you are probably aware of the incredible highs that Bitcoins have been through during their relatively short life span (the all-time high was $1070 in November of 2013). That incredibly high historical price often puts potential investors off, who think to themselves that it is too late – that Bitcoin’s day has been and gone – but is that true?
Although Bitcoin’s value has normalized substantially, the fact remains that Bitcoin’s value remains high. In January of 2013, they were worth $13, and now they are worth $240. Although the cryptocurrency’s value does fluctuate more than regular currencies, those fluctuations in price are remaining much more stable now. This year, it has remained at around $230 all year, with a noticeable slight hike in price when there were rumours of a possible Grexit from the Euro. So? Are Bitcoins looking like a safe investment after all?
The possible Greek exit from the Euro this year highlights a previously unnoticed advantage of Bitcoins that appears to make them more useful (and, therefore, valuable) than perhaps previously realised. When Greece was going through the height of its financial problems this summer, the Banks in Greece put a limit on the amount of money that each person could withdraw each day. This was done to limit the natural bank run that occurred, therefore restricting the severity of extra damage that could be wrought as people began to withdraw their cash in a panic – fearing total economic collapse.
At that point, Greek individuals with the know how decided to convert their money into Bitcoins to get it out of the bank (and country) as quickly as possible. Until this happened, not many people had really noticed this advantage. Bitcoins may be volatile, but they also exist outside of the control of the banks. During troubling times, this allows people to move their money quickly out of the bank and (if necessary) into a different country. Bitcoins then, can be used to move money from one country to another while also avoiding exchange rates. Groundbreaking.
Now, Asia is becoming an encouraging talking point for Bitcoins too. Asian markets are incredibly tech-friendly, and because they represent half of the world’s population they may hold the key to the currencies continued success (and value). Firstly, as noticed in Greece this summer, Bitcoins make it much easier to transfer money. This allows Asians – for whom it is quite common to send money back to their families – to move money quickly and more cheaply than with traditional methods. Bitcoins do not have to be subjected to exchange rates and fees during remittance, making them highly advantageous to these people.
China, which is known for its manufacturing prowess, can also benefit from this aspect of Bitcoins. Being in the business of manufacturing, also involves regularly moving money across borders. Using Bitcoins means avoiding the strict government regulations that the Chinese government imposes. According to Huobi founder and CEO Leon Li,
‘China has about 20 bitcoin companies of notable size with about 800,000 total users and constituting about 70% of global bitcoin trading volume.’
In the Philippines, which is ranked third in Asia for incoming remittances, two Bitcoin companies Coins.ph and Paylance are taking advantage. Coins.ph has also managed to strike a deal with MetroDeal the second largest e-commerce website in the Philipines – a company that is identical to US company Groupon. Ron Hose CEO of Coins.ph explains why, in a country where most people do not have a bank account, but 44 million people use the internet, Bitcoins are a game changer,
‘In contrast to developed countries, where Bitcoins as a payment method are more of a novelty – here it is serving a real problem. For instance, credit card penetration in the Philippines is 3%. Only three out of 100 customers that land on an e-commerce site have an immediate way to pay for it.’
In Vietnam, the largest Bitcoin exchange VBTC (Vietnamese language) has relaunched on BlinkTrade’s platform with their eyes firmly set on gaining a foothold in the $14 billion remittance market. VBTC promises to process international transactions to Vietnam in one hour, converting it to the local currency and boasting of hundreds of locations nationwide to withdraw the cash. Commenting on the relaunch, Bitcoin Vietnam Co-Founder Dominik Weil said,
‘VBTC will allow us to handle Bitcoin remittance services towards Vietnam in a very fast and price-competitive way. In an ideal setup it will take you less than one hour to send funds to your beloved ones in Vietnam – from sending the Bitcoins to us until the recipient in Vietnam holds the cash in his hands.’
This seems to be affecting grassroots commerce in Vietnam already. Travel agent Future.Travel for example (which provides services such as flight tickets, cruises, tours and hotel accommodations) has already started accepting Bitcoins – making it the first Vietnamese business to take Bitcoins on their website. Commenting on the decision, David Watson the general director of the company said,
‘We are a progressive, future-thinking company and can see the value to the consumer, as well as to ourselves, for accepting this method of payment.’
Indonesia (like the rest of Asia), is still a developing country. Like some of its Asian counterparts, however, it already has websites that accept Bitcoins. On top of that, Bitcoins are now accepted in 10,000 stores nationwide in the Indomaret (Indonesian language) chain. With an estimated 200,000 people that do not have a bank account, and with its level of remittances also high: it is not surprising that people there are beginning to show an elevated level of interest in the digital currency.
With the price of Bitcoins significantly less volatile than in previous years, and Bitcoin starting to emerge as the obvious choice for international money transferal. Are Asian markets, which are increasingly becoming receptive to the modern decentralized currency, showing signs that not only are Bitcoins here to stay but that the Rothschild’s nightmare has only just begun?