OIL Vs BITCOIN: The Best Way To Hedge Against Inflation

In recent years we have witnessed the technological revolution going at such a rapid pace that we hardly even realize it. The development of the internet has allowed the mass use of specialized tools such as email, smartphones, and home banking, among some of the best known.

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The digitization of processes is attracting more countries

Experts agree that we are heading towards a multipolar world, where the power currently wielded by the United States will be shared with other countries and economic blocs such as China, unified Europe, India, and the Asia-Pacific region.

These countries and blocs that will share leadership may question the use of the US dollar as the widely dominant bargaining chip in international trade. That is why it is suggested to agree on using virtual currency as a payment method in financial transactions involving oil.

Three terms that significantly impact the world economy are OIL, BITCOIN, AND INFLATION. Although they are entirely different terms, they are interrelated as macroeconomic indicators.

 If, even if you don\’t believe it, BITCOIN is setting such a trend that it is most likely that it will position itself as a MACROECONOMIC indicator in the not too distant future

Bitcoin vs oil against inflation

Bitcoin is the opposite of fiat currency, where the maximum amount of bitcoins that can be issued is set in its white paper and is 21 million, not one more, not one less. We must be clear that when BITCOIN (BTC) is created, it responds to this same inflation and not for its misuse as money laundering.

Instead of decreasing inflation every day increases rapidly, in some countries more drastically than in others; as a result, central banks issue fiat money, which instead of contributing worsens the world economic situation.

Where we must be clear that currencies such as the dollar, for example, are no longer backed by gold, so it makes us think that the support of fiat currencies in the world is where the traditional economy is going.

The countries\’ economies are constantly changing, and although it sounds curious to think that an asset like BTC PROTECT THEM FROM INFLATION, it is not something impossible.

Cryptocurrencies, in this case, BTC, is an increasingly popular refuge for investors with a phobia of inflation, not only as a shield against it but as an option to capitalize on the increase in prices. The attractiveness of these original Digital coins depends on the type of inflation that investors fear.

Every day it becomes more common to hear payment of goods and services through cryptocurrencies.

This leads governments to think of strategies that can help reduce inflation and, therefore, the issuance of money and contribute to the economic exchanges where OIL is probably the most essential raw material for financial markets.

Currently, countries like Venezuela have opted to create cryptocurrencies backed by oil reserves; said initial support was 5,000 million barrels of oil from the Orinoco Oil Belt, as previously gold backed the dollar.

This is to carry out the most significant economic transactions through virtual currencies and avoid the generation of money that will consequently produce higher inflation.

Oil is considered an essential element for the business of thousands of listed companies, dedicated to exploration, production, refining, or infrastructure maintenance services, in addition to its movements having a considerable impact on inflation rates.

In turn, it is considered one of the most critical indicators for large central banks, evaluating in some way the health of an economy, maintaining stability in inflation rates.

Conclusion

As mentioned above, there are many parties involved in the oil marketing process; governments, companies, central banks, among others, and it is when the BITCOIN or Cryptocurrencies appear to help counteract the inflationary impact through its use as a payment method.

First, avoiding the issuance of fiat money and secondly reducing the use of central banks, therefore, commission payments to third parties since the blockchain platform is the one that certifies these transactions without having to pay for this.

We are getting closer to a door that will allow us to enter a world where the economy and finances will be managed and controlled by technology and the various digital security protocols, ensuring that inflationary processes can be beaten and offer stability to nations.

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