Lebanese may turn to Bitcoin to protect themselves from the effects of the country’s economic crisis
According to a poll widely published on Twitter, more than half of the 6,661 voters would choose to receive their salary in Bitcoin. Although they prefer to receive dollar bills, they are not interested in receiving the money in their own fiat currency, which has collapsed against the US currency.
Would you rather receive your monthly salary for your job in Lebanon in:
– Dan Azzi (@dan_azzi) May 20, 2020
In 2020, economic turmoil and distrust in banks that increased during the coronavirus caused people to adopt the world’s main digital asset.
Unprecedented economic collapse
The result makes sense, given that Lebanon is facing an unprecedented economic collapse, where prices for basic goods have doubled in at least the past two months, leaving them out of reach of half the population.
Prime Minister Hassan Diab also acknowledged that Lebanon is on the verge of an “unimaginable food crisis”. Its long-standing currency continues to fall and is still being used to pay for imports.
The crisis is likely to hit the impoverished communities more strongly and put more pressure on the middle class, widening the gap between the elite and the rest. The banking system in the country is also destabilized, with protests over central banks and bank branches increasing.
Banks have gradually stopped all dollar withdrawals in recent months, while the central bank said that withdrawals could only be in local currency at the market exchange rate to be determined by banks, which the Lebanese call “armed robbery” ”.
Meanwhile, its local currency has dropped more than 60% against the dollar.
The speculative world of booms and busts
It is clear, therefore, why Lebanese are more interested in earning their livelihood in Bitcoin than in fiat currencies.
However, Peter Mallouk, CIO at Creative Planning, a wealth management company, says stocks and bonds are better options than gold and Bitcoin.
“There is no need to enter the speculative world,” he said on CNBC on Thursday, arguing that the digital asset and the precious metal “see a lot more noise and explosions.”
Meanwhile, Bitcoin was not only the best-performing asset of the past decade, but it continues its winning streak in 2020.
In addition, governments cannot confiscate Bitcoin, not to mention that digital currency can also be moved across borders easily.
Even gold cannot help in such an evident scenario, with Venezuela suing the Bank of England for refusing to release its gold.
Mallouk may be advising you to invest in bonds, but even he is not confident in that approach, as he said that giving your money to the government or companies is in the promise that they will pay you and, hopefully, they need to be economically stable for that. .
It is also difficult to follow his advice when, in December 2018, he declared Bitcoin “dead” when its price reached the $ 3,200 low.
Text adapted from: Bitcoin EG