As many economists predicted, the Italian constitutional referendum of 2016 shook the country’s banking system to the core. Italian bank stocks have plummeted drastically since the referendum and it comes at a time where the digital asset bitcoin is seen by investors as a safe haven. In addition, Chinese bitcoin interest has grown exponentially as the yuan devalues and the country faces economic uncertainty.
Many economies around the world are facing difficult times. One particular event that has stirred the global economy was the Italian referendum held on Sunday, December 4 that changed the composition of power within the country. The reform also saw the resignation of Prime Minister Matteo Renzi, who was then replaced by Paolo Gentiloni. But the biggest problem was the Italian banking systems’ turbulent situation and imminent economic danger. Italy’s third largest bank Monte Dei Paschi shares fell to their lowest of the year on December 23 with the bank suspending trading this past Friday.
In China, analysts believe the country’s capital outflows will continue to rise as the yuan faces daily devaluation. Bitcoin.com recently spoke with Spencer Bogart, Equity Research analyst at Needham & Company who said:
“to the extent that China further tightens capital controls in 2017 the burden will likely be focused on other more prominent and heavily used channels for capital flight. If so, some capital outflows will shift to other channels, and Bitcoin is a likely benefactor in this scenario.”
During these economic storms investors traditionally look for safe havens in bonds, other fiat currencies, gold, and other commodities. However this year global investors hear more and more about the safe haven benefits of bitcoin. Mainstream media has been highlighting the fact that bitcoin has outperformed nearly every fiat currency worldwide.
With countries all over the world having difficulties with monetary central planning, bitcoin is slowly becoming the solution. Global investors have grave fears when it comes to the current banking situation worldwide and increasing austerity measures from governments. It’s hard to keep a positive outlook when the world’s oldest bank comes close to failing in Italy. Italy’s Monte Dei Paschi is currently seeking a government bailout and this decision could shake markets.
Bitcoin will likely continue to be popularized as a store of value and a great safe haven from these troublesome economic times. There’s no bailouts or central planning, nor can governments or corporations shut the network down. This gives bitcoin a significant value proposition like no other currency or commodity. Bitcoin remains useful because of “classic supply and demand” as one of the most useful financial innovations of our time.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.