FSM Media

by Dianna Ranere

IMPLICATIONS THAT THE PARITY BETWEEN THE EURO AND THE DOLLAR CREATES ON BITCOIN

The global economic and financial scenario shows that we are not in a simple game of supply and demand; there are too many external factors that are somehow exhausting the financial market. More information on the bitcoin trading software system

What does equality between the euro and the dollar mean?

An economic phenomenon that has not occurred for around 20 years, today we are facing the depreciation of the euro against the most widely traded currency in the world known as the dollar.

The effect that this could undoubtedly cause if this trend continues is that the Eurozone economy would be even more strangled after the impact generated by the war in Ukraine and Russia.

One of the main fears of European economists and finance managers is that this situation could increase inflation, which would lead to higher prices and therefore end in an economic recession that does not benefit anyone.

Imports from the European zone are primarily handled in this currency that today is equated to the euro, where one could speak of 40 to 60% of the global amount of the operations that are processed in this part of the world.

It could be deduced that the dollar is somehow taking its toll on the euro since most of the products derived from hydrocarbons are paid for in dollars, which is not friendly for Europe.

These are delicate circumstances that the market enters a state of global alert before possible fractures of the economic system, and its recovery could be even worse.

More attention to Bitcoin

With the fall of the euro and placing itself at an equal price with the dollar, more controversy is generated around Bitcoin, where its followers, users, and opponents express opinions daily.

The medium that has allowed these comments to highlight the attention on Bitcoin is undoubtedly social networks.

Economies often go through complicated phases where many tend to make judgments, but let us remember that whenever there is a fall or rupture, a recovery phase follows. It is unknown how long it may take to occur, but it is a sure thing.

Bitcoin has dropped more than 50% of its value, and many assume it will recover, reaching the distribution phase again to leave the crypto winter behind.

Digital currencies may recover more efficiently since the elements that modify them are simple to supply and demand, the basis of any market, unlike a country’s economy since many factors influence change.

Although Bitcoin has had a recovery for the economy in Europe, it is not usually the most beneficial to see its legal tender fall; this represents amounts of printed money driving inflation to a higher level.

Gains with Bitcoin and losses with Fiat currencies

Economists and investors are at a crossroads since many assume that the European currency could further decrease in value, which for many puts investments in cryptocurrencies on the scene.

Many individuals and business people consider Bitcoin a pyramid scheme; they have not realized that there could be great potential in digital currencies.

Given this situation, it should be noted that price changes in a cryptocurrency occur when demand or supply increases. In contrast, in the case of demand, it allows its price to grow, and if it is the case of supply, then the value will be decreased.

The variations between supply and demand can be relatively fast, which characterizes the crypto market, and volatility, but always maintaining the game of these two fundamental elements of any economic theory.

It is now when positive comments for Bitcoin will emerge after the euro fell.

Those most affected by the crypto crash

When a downtrend is generated, they will always be affected, only in this case, some more than others; we have seen how large crypto fund corporations have declared bankruptcy because they did not stipulate a transcendental fall.

Although it could also be assumed that the most affected were the retail investors since the little they had invested turned out to cause them the greatest fear of losing everything, and that was when they increased sales abruptly, and the market continued to fall.

Conclusion

It is the political actors and centralized entities that control the economy that currently have control over what could happen in the not too distant future with the economy of world powers, whether in Europe or America.