The financial industry is going through a disruption process. And the reason for this disruption is the existence of the cryptocurrencies that were introduced in 2009. When it was first released in the market, people could not trust the new concept of the currency system. Furthermore, there was nothing that backed up the value of the currency. It took quite a time for the people to understand the concept of cryptocurrency and the proper way to implement it.
Gradually people got to know about the existence of cryptocurrency and could trust in the crypto trade market. However, the trust was broken with the scams and fraudulent activity. This was when the credibility of bitcoin and the cryptocurrency was at the lowest level of their career.
Times passed, new methods and technologies were introduced in the crypto trade market. This led to the rise in the trust of the people. Soon after, the historic price rally occurred in 2017 that sealed people’s trust in the cryptocurrency’s credibility.This is where traditional fiat currency started feeling pressure from the existence of bitcoin and other cryptocurrencies.
Reasons why fiat traditional currency hate bitcoin
Most financial institutions do not like bitcoin because their business has taken huge damage. After seeing how bitcoin is being used in the market, fiat currencies fear losing its position as the only mainstream currency.Here are the reasons that made the fiat currency think so.
- Decentralized nature
We all know that bitcoin is a decentralized currency, that means no government or any other institutions will hold any kind of authority over it. This nature means the government will not be able to keep track of the transactions made with the help of blockchain technology. This nature of the crypto transactions makes the financial institution oppose the whole cryptocurrency thing.
- Increased value of the bitcoins
Bitcoin’s volatility has always confused people with the decision to trade in bitcoin or traditional assets. But now that the bitcoin price has increased and is well over $10,000, people are showing their interest in the spiked price. The high price evaluation has attracted many traders and investors in the crypto trade market. Today, youngsters are also showing their interest in the cryptocurrency. If you are one of the youngsters, you can use Bit-Bolt to start your crypto trade career.
- Excess use of the bitcoin in the trade market
Traders and investors have played an important part in bringing cryptocurrency this far. Initially, they were afraid of investing in bitcoin and other cryptocurrencies due to the fraudulent activities that have been in the past. However, with the ICOs (Initial Coin Offering) in the picture, traders and investors could regain their trust in the cryptocurrency investments.
Now that people are moving toward the cryptocurrency for the investment, fiat currency industries are getting pressurized by the clients leaving their firm and joining crypto firms.
- Financial institutions are losing control over the market
Financial transactions are one of the major sources of income for financial institutions. But looking at the trade market today, where most of the transactions are done with bitcoin or other cryptocurrencies, financial institutions think that they might lose control over the market in the future. You can even think this to be one of the big reasons financial institutions oppose the whole concept of cryptocurrency.
- Future threat to the fiat currencies
Seeing how the bitcoin is regulated in the market, it clearly shows that there is a possibility where bitcoin can take over the market completely. This possibility has been haunting the fiat currency industries. There are experts who believe that the way cryptocurrencies are rarely regulated might replace fiat currencies in the future. If that were to happen, then all the financial institutions like banks will be out of business.
All the factors that I have mentioned above clearly show that all financial institutions do not like the bitcoin’s presence in the market. Even after some of the banks that have adapted to the blockchain technology use are not in favor of the cryptocurrencies. What are your thoughts on this? Do let me know in the comment section.