The U.S. and China are used to being the two most influential economies in the world. And no matter what numbers or trends you may look at – even as the two nations are in conflict with one another – this doesn’t figure to change anytime soon. There is one significant new corner in the global financial world, however, that the U.S. and China may not have much control over. That corner is cryptocurrency, and because it’s designed to have universal appeal and operate across borders, even economies the size of The United States’ and China’s may prove to have limited sway over its rise.
That’s not to say there aren’t things either government can do to attempt to swing cryptocurrency usage among their own populations. China in particular has already sought to do so, and there have even been indications at times that this has had some bearing on the overall strength of prominent cryptocurrencies. However, some of the key factors that could inflate cryptocurrency prices and value internationally are beyond either country’s sphere of influence. For instance:
Struggling Financial Systems
One of the most interesting things people have been noticing about bitcoin and cryptocurrency in general is its potential to serve as a safe haven in an economic storm. This is something we’ve long associated with gold and other precious metals, and is a major reason that bitcoin is frequently compared to such commodities. To be clear, this is not a suggestion that cryptocurrency necessarily should be considered a safe haven. However, economic hardship in Greece, Argentina, and more recently Venezuela has led to noticeable upticks in crypto spending. If we imagine this on a larger scale – say, a European recession – it’s the sort of thing the U.S. and China couldn’t really stop or control, and it could lead to a legitimate surge for cryptocurrencies.
For quite a while it was no big deal that a relatively small handful of private investors controlled a disproportionate amount of bitcoin (and presumably other cryptocurrencies, though this is less documented). Some estimates peg about 40 percent of the available bitcoin being owned by fewer than 1,000 accounts. This means there are massive players in the cryptocurrency market who could be operating anywhere, and who could have any number of different priorities or reads on the market. In theory these mega-investors – “crypto whales” as they’re sometimes called – have more control over cryptocurrency markets than any government or financial institution.
The Gambling Economy
Here too we have an area of potentially major crypto movement that at this stage operates internationally. That is, China and the U.S. can forbid online casino and betting activity if they like, but for much of the world, from Oceania to Europe, these activities are readily available – and work quite well with cryptocurrency. A New Zealand resource on internet gambling activity specifically points out that improvements in payment processing and software have allowed sites to safely and securely accept funds from many different sources. Those sources are expanding, we’re beginning to see, to include cryptocurrencies. This is an idea that could catch on like wild fire without any U.S. or Chinese influence, and significantly boost cryptocurrency performance around the world.
The Technological Takeover
There’s also something to be said that the world is getting more tech-dependent with each passing year (if not day). Right now, the idea of storing currency as a digital token and transferring it merely via code still seems very foreign to a lot of people. With the general progression of the worldwide technological takeover however, it’s reasonable to expect that in a few more years, this will seem much more normal – and possibly even downright appealing. The U.S. and China can’t do much to swing this kind of general progression, and may in fact have to respond to much greater demand for digital currency trading in the years ahead.