What If You Wake Up and See You lost 96%?
You see you just lost 96% of your holdings. You must be dreaming or, maybe you put your money in cryptos that crash hard. No, you are not dreaming, it happened in Lebanon's fiat currency. The financial system we trust and keep our money in the bank shows what is possible if things go wrong.
The central bank puts different restrictions on savings in banks. The situation has changed since 2019. And it gets worse over time. They are having a financial crisis. The bank introduced haircuts on dollar withdrawals. It started with 15% haircuts, now it reaches 85% haircuts.
People in Lebanon are going through a hard time. According to the United Nations, 78% of people in Lebanon are living below the poverty line. They have money in the bank that has already lost its value. People work hard and save money in the bank, but unfortunately, now they end up with almost nothing.
There are incidents where people withdrew money from the bank at a gunpoint. Can you imagine that? This is what happened over there to get money from the bank. The price of products is skyrocketing. What they earn from a job fails to support them. People look into Bitcoin to store their money.
Some Lebanese locals started mining bitcoin. They earn bitcoin and convert that into USDT to buy goods and services that they need. Businesses accept USDT to sell their products in spite of prohibiting crypto payments in law.
Can they trust their traditional financial system? It gets them rekt. They work hard to build their wealth, but due to the economic crisis, what they have in fiat currency disappears like magic.
Bitcoin is out of the reach of the government. That's safe to save for the long term. People are turning to Bitcoin. If something like that happens in your country, what would you do?
Bitcoin shows how they can use it as a store of value. There will not be more than 21 Million bitcoin on the face of this earth. On the flip side, fiat currency prices will only go down over time. You might not feel it before, but everyone feels it because of hyperinflation.
So how do you see cryptocurrency protecting yourself against an economic crisis? Please feel free to leave your comments. Thank you for reading this post. That's it for now. I'll be back with another post.
Image Sources: 1, and 2.
Reference: 1.
About Me
Hi, I am Rezoanul Vibes. I'm a content creator and passionate learner. I write about lifestyle, finance, martial arts, and digital marketing. I'm glad to meet amazing people all over the world.
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It's quite unfortunate that if the centralized banking system is operating this way. I think the way foward is looking for decentralized finance. Thanks for sharing
People will prefer decntralization over centralization. They see what's going on in centralized entity even in crypto.
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It's too bad for the people who rely on the fiat but I live in the US and the USD will be the last one to fall. So I am not worried about that as it won't affect me right away and I can just invest in assets beforehand. However, I do know that every investment has a risk and I know that I won't always have things work out.
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What you think now, maybe you have not thought like that before. It's not safe putting everything on fiat currency. I think it is time to focus on building your wealth out side of the traditional financial system.
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