Isn’t it true that the best money wins? How Anti-Bitcoin Nations React To Its Growth
It was inevitable that the “Bitcoin Law” established by El Salvador, as well as its rising acceptance, would elicit a negative reaction. The mainstream media has been repurposing stories about BTC’s purported harmful environmental effect, its usage in illegal activities, and other topics.
However, Pieter Hasekamp, the Director of the Dutch Bureau for Economic Analysis, may come in second place for the week’s most anti-Bitcoin essay. His article, “The Netherlands Must Ban Bitcoin,” is a scathing critique of Bitcoin and a defense of fiat money.
As a result of its “unclear origin, unknown price, and dishonest trading activities,” he considers cryptocurrencies to be a terrible form of money. He even claims that bitcoins aren’t used in normal financial transactions.
Gresham’s Law, which was developed in the sixteenth century and is used to quantify the qualities of good and bad money, forms the foundation of his argument. A basic principle of this economic legislation is: Bad money suffocates good.
Hasekamp argues that the Bitcoin defense argument is incorrect. He says that cryptocurrency lacks all three of money’s functions: unit of account, method of payment, and store of value. Simultaneously, he said that fiat currencies “score well” in these areas and serve as a good store of wealth. He stated, «In recent decades, there has been hardly any currency devaluation. Although inflation is now cautiously rising, there are few people who believe that we are returning to the figures from the 60s and 70s.»
According to the government source, new forms of electronic payments based on fiat currencies have made them easier to use. In actuality, the present financial system, he concludes, functions “very effectively.” He believes that central bank digital currencies (CBDCs) would enhance it much more in the future. He goes on to say: «Cryptocurrencies are therefore unsuitable as a unit of account and means of payment outside the criminal circuit (…). Gresham’s law is replaced by Newton’s law: what goes up, must come down. The ultimate collapse of the crypto bubble is inevitable.»
Bitcoin, on the other hand, is a tool for progress.
Officials from the Dutch government have urged countries that reject Bitcoin to take action. He thinks that delaying the “imminent” crypto meltdown will make it worse. Later, he makes a comparison between cryptocurrencies and drug trafficking, arguing that a complete crypto prohibition would be more effective.
A refutation was posted on Twitter by David Rosa, a Ledger developer. Bitcoin, he believes, must move through the qualities of money in stages, starting with a store of value and progressing to a unit of account. Furthermore, he underlines that BTC is a new asset. As a result, many people attempted to “become wealthy quick” by using it.
These investors will eventually learn about Bitcoin’s distinctive qualities, including as immutability, censorship resistance, scarcity, and permissionlessness. Many of these traits have made BTC a desirable asset for citizens in impoverished nations like El Salvador, who now have access to a global financial system and savings account that is beyond the grasp of central banks. Rosa expressed herself as follows: «t’s intellectually dishonest to blame #Bitcoin and crypto assets for the financial instability caused by a crash. The fiat system is marked by central banks keeping interest rates artificially low, causing a misallocation of capital which in turn leads to huge corrections.»
People eventually resort to BTC because they have lost faith in their governments. According to Rosa, this is the most serious situation at the time. Central banks appear to serve their own interests more frequently than the interests of the people they purport to safeguard across the world.
BTC is now trading at $37,041, with lower periods showing sideways trend. If it wants to overcome resistance at $38,000 and $40,000, the #1 cryptocurrency by market cap needs a push from the bulls.