How an Emerging Markets Currency Crisis will Cause Coin Prices to Explode

Cryptocurrency Coin Prices can explode because of currency crises erupting around the world.

Argentina, Venezuela, and Turkey are reportedly in the midst of destructive currency crises. Disturbingly, author Satyajit Das thinks the currency crisis can spread to Brazil, Indonesia, South Africa, and India.

“Based on these criteria, the number of emerging markets at risk extends well beyond Turkey and Argentina,” Das wrote at Bloomberg. Das believes the world is facing a “textbook emerging market crisis” that could spread fast.

How an Emerging Markets Currency Crisis can Cause Coin Prices to Explode

A fast-moving emerging markets crisis can greatly increase demand for cryptocurrencies. Altcoin prices could shoot up as residents of crisis nations seek safe havens for their money.

Cryptocurrency is the easiest and fastest way for Argentines, Turks, Venezuelans, and others to move their money out of country. All a person needs to convert funds to altcoins is a credit card and an internet connection. Anybody can download a digital wallet, and buy cryptocurrency in a few seconds.

There is evidence such panic buying is already occurring. Over 200 Venezuelan merchants a month were singing up to accept Dash (DASH) payments in August, Dash Core Group CEO Ryan Taylor claimed.

“We are seeing tens of thousands of wallet downloads from the country each month,” Ryan Taylor, said in The Business Insider. “Earlier this year, Venezuela became our No. 2 market, even ahead of China and Russia, which are huge into cryptocurrency right now.”

Not coincidently, Dash (DASH) has become the 12th most valuable cryptocurrency according to Coinmarketcap. DASH achieved a Coin Price of $171.37, a Market Capitalization of $1.563 billion, and a 24-Hour Market Volume of $188.714 million on 6 September 2018.

How a Currency Crisis and Hyperinflation can Boost Cryptocurrencies

International Monetary Fund (IMF) economists expect Venezuela’s inflation rate exceed one million percent in 2018. A chicken costs 14 million Bolivars (Venezuela’s currency), The Guardian reported.

A similar crisis is unfolding in Argentina. The Argentine Peso lost over 45% of its value in the first eight months of 2018, CNBC estimated.

That means the average Argentine’s salary lost 45% of its buying power this year. Therefore, the Argentine can only buy 45% of the food she could purchase in January 2018. Every citizen of Argentina has experienced the equivalent of a 45% pay cut in 2018.

How a Currency Crisis and Hyperinflation can Boost Cryptocurrencies

A fast moving currency crisis will obviously boost some cryptocurrency prices. Speculators will wonder which altcoins will benefit from the currency crisis?

Here are my picks for cryptocurrencies that might benefit from the currency crisis.

  • Dash (DASH) – The cryptocurrency formerly known as Darkcoin is already being accepted by merchants in Merchants as I noted above. DASH is a privacy cryptocurrency with extra encryption and anonymity. That will enhance its popularity in countries where citizens live in fear of government thugs and police.

 

  • Pundi X (NPXS) – I pointed out that the company behind this ERC20 Token and Manticora Capital reportedly have plans to set up 1,000 POS (Point of Sale) terminals in Colombia at Market Mad House last month. Colombia is right next to Venezuela. To add icing to the cake, the Colombian Peso is weak it was worth $0.00032 in US Dollar on 6 September 2018. Therefore, Colombia is ripe for a currency crisis.

 

  • Bitcoin (BTC) – The granddaddy of cryptocurrencies has some serious advantages. Bitcoin can be purchase a wide variety of stuff online including gift cards.

 

  • Moreover, there are many automatic teller machines (ATMs) that will convert Bitcoin to cash in countries like the USA. That makes Bitcoin very attractive to middle-class citizens fleeing countries like Venezuela. Up to 2.3 people might flee Venezuela alone, Newsweek predicted.

 

  • The Dai (DAI) – This ERC20 “stablecoin” is designed to be worth one U.S. dollar. The Dai’s value might shoot up because the greenback is widely used in countries like Venezuela. As an ERC20 token the Dai is easily converted to Ether (ETH) by the Ethereum Virtual Machine. More importantly, the Dai is part of Bancor’s liquidity network.

 

  • Bancor (BNT) – Bancor is associated with a liquidity network based on the Bancor Protocol. The Bancor Protocol enables fast conversion of ERC20 cryptocurrencies to each other and Ethereum (ETH). Cryptocurrency owners fleeing emergency markets will need a conversion tool like the Bancor Protocol.

 

  • Ethereum (ETH) or Ether (ETH) is the second most popular cryptocurrency. Ethereum was much cheaper than Bitcoin (BTC) on 6 September 2018 with a Coin Price of $226.68. Demand for Ether can most of the blockchain platforms for business and commerce utilize Ethereum-based ERC20 tokens and the Ethereum Virtual Machine.

 

  • Ripple (XRP) – Several big banks including Mitsubishi UFJ Financial Group Inc.; the world’s fifth largest bank, are testing Ripple payments, Ethereum World News claimed. Banco Santander SA (NYSE: SA) has reportedly been experimenting with a Ripple App. Up to 61 banks in Japan might test a Ripple App called Money Tap, Market Mad House reported in March.

 

  • People fleeing countries like Venezuela will want to put their money in banks. Ripple might make that possible. Ripple (XRP) was the world’s most popular; cryptocurrency with a Coin Price of 29¢ and a Market Capitalization of $11.512 billion, on 6 September 2018.

  • GoldMint (MNTP) or GoldMint (GOLD) – Purchasing Gold is one of the first things panicked people do in a currency crisis. GoldMint is a cryptocurrency backed by gold futures. A huge advantage to GoldMint is that it stores the gold in Chicago; where it is safe from emerging nations’ tax collectors and secret policemen. GoldMint is an ERC20 Token so it is Ethereum-convertible, and part of the Bancor Network.

 

These are just a few of the cryptocurrencies that might benefit from an emerging markets currency crisis. Speculators should be careful because there is no guarantee the currency crisis will spread, and a strong possibility it might not affect altcoin prices.

Despite that, the currency crisis is a development every cryptocurrency speculator and investors must monitor closely.