Aktiespararna, a news site of the Swedish Shareholders’ Association that offers investment advice, has posted an article presenting bitcoin as a future currency that can address the problems of security.
The article focuses on the importance of security on account of crises afflicting traditional currencies. The example offered is the 2013 financial collapse in Cyprus caused by the banking system’s liquidity and solvency problems.
As an investment, the article noted bitcoin carries a high risk. But it offers an interesting feature of a well-diversified portfolio.
The Cyprus Experience
To save the banks, the Cyprus government imposed a tax and a limit on how much money customers could withdraw from ATMs and transfer abroad. In response to this situation, many Cypriots discovered the benefits of bitcoin. The key benefit was that bitcoin is completely decentralized; there is no central unit that can control the system or affect the money supply.
Today’s money system, the article noted, is based on debt. A bank customer’s balance is someone else’s debt. The idea behind bitcoin is for the individual to be free of the banking system.
Bitcoin’s price is based on supply and demand, and the price has been highly volatile. But the price trend has been upward as new users drive demand. There are currently about 10 to 12 million active bitcoin wallets globally.
More people are likely to use bitcoin since an estimated 2 billion worldwide do not have bank accounts.
As a resul,t the article noted:
“The potential of an investment case based on the widespread adaptation of crypto currency is therefore great
Blockchain Offers Improvements
The blockchain, the digital accounting system that supports cryptocurrency, allows transactions to be done faster and cheaper than the traditional banking system. To transfer funds from a Swedish bank to Australia can take up to four business days. With bitcoin, the transaction takes one minute at the most.
In 2014, the Cyprus government issued a warning concerning the potential dangers associated with digital currencies. The ministries of trade and finance and the central bank warned that people could lose their money by investing in digital currencies.
Swedish Bank Responds To Bitcoin
Swedish bank Skandinaviska Enskilda Banken AB (SEB) sponsored an article in 2015 in a daily newspaper taking a cautious look at bitcoin. The article noted bitcoin’s long-term appeal is its ability to fall under the purview of global regulations, but that it needs stability.
Most of the reader responses to the recent Aktiesparaarna article commented on OneCoin, an altcoin based in Sofia, Bulgaria. Readers offered different views about OneCoin.
CCN reported in July that the Belgian Financial Services and Markets Authority warned that certain OneCoin promoters were misrepresenting their relationship with the Belgian authority.
Images from Shutterstock.