The Impact of Crypto Currencies on the Economy and The Financial Industry
Journal Title: Journal of Advances in Humanities Research - Year 2022, Vol 1, Issue 1
Abstract
This paper is based on the discussion about cryptocurrencies and its impact on the financial industry. However, the adoption of cryptocurrencies is a different matter because right now Bitcoins is considered for wealthy, developed and tech-savvy cultures. Based on the analysis of the points of differences in the currency a country's profile can be developed as to who are more likely to adopt Bitcoin. Cryptocurrencies are considered a potential solution against accessibility, exchange, fraud, and inflation. Moreover, the prices are considerably increasing because the demand for core goods is growing rapidly relative to supply. As per the analysis the fiat currency system is considered as the main reason for future inflation however it will not cause any significant problem in the overall financial industry. The growing demand for housing is also increasing the price of lumber which also increased in the prices of wood. Consequently, all the related goodwill becomes more expensive following the trickle through the economy. Moreover, the asset market also contributes considerably to inflation. An increase in the price of certain commodities incentivizes the people who are producing those commodities. In this regard, the producers withhold the supply of those commodities which eventually results in increased prices. Furthermore, inflation can also be caused by the supply shock like the interruption in oil supply to Southern US caused by Katrina devastated. It caused fluctuation dramatically in the real exchange rates instead of producing desired results. The fluctuation also triggers the development of three asymmetries in the exchange market. The first factor that comes into play is loss aversion which means that the losing side will suffer more loss vocally and acutely as compared to the less vocal winning side during the time of depreciation or appreciation. Hence, the fiscal policy will experience more disturbances.
Authors and Affiliations
Mohammed Ssaharti Aston University
Keywords
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- EP ID EP710037
- DOI https://doi.org/10.56868/jadhur.v1i1.11
- Views 59
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