After the COVID-19 pandemic, the need for financial protection caused the boom for cryptocurrencies in Spain. Inflation and the shortage of commodities lead citizens to turn to Bitcoin as an alternative to fiat money.

Enrique De los Reyes, a representative of Spanish cryptocurrency exchange Bitbase, recently talked about the success of Bitcoin. He said that the growing financial needs of citizens contribute to the massive adoption of the cryptocurrency.

In 2020, the COVID-19 pandemic caused anxiety about protecting material goods among the population. More than five million Spaniards have adopted Bitcoin and other cryptocurrencies as an alternative to fiat money.

Those numbers indicate that there is evident demand for cryptocurrencies in Spain. The increase in the prices of goods and the devaluation of the euro (EUR) has led citizens to seek financial alternatives. That has been an unprecedented event in a country where people did not worry about their finances.

De los Reyes stated that Spain is a longer-lived population that does not worry about its economy or finances. He commented that Spaniards always remain linear, given the economic security provided by the euro. Since they were the fourth largest economy in Europe, there were few reasons for citizens to seek refuge in Bitcoin.

However, the situation has changed since the euro has undergone significant devaluation and the European Central Bank has printed a large amount of money. Those factors would create a crisis that would cause Spaniards to stop thinking linearly and turn to Bitcoin.

The representative of Bitbase considers that the countries with the worst crises are the best to adopt cryptocurrencies. He thinks crypto businesses have more opportunities when citizens need new alternatives.

Other Countries besides Spain Prove the Crisis Hypothesis

De los Reyes saw the crisis trend as a catalyst for the growth of cryptocurrencies in Venezuela. By 2017, the worst time of the economy in the South American country, there was a boom in adopting Bitcoin and other crypto assets.

Hyperinflation, a shortage of commodities, and a highly restrictive exchange market made the quality of life of Venezuelans decline. However, the cryptocurrency industry did not suffer the economic effects and grew with new miners, users, and companies accepting crypto assets as payment.

Even though the country was doing poorly, the adoption of Bitcoin was successful at that time. The same happens in different countries facing a weakened monetary system and a discouraging economy. Citizens seek ways to protect their income and take risks with new alternatives.

Spain and Venezuela are not the only ones, as the crisis has also favored Bitcoin in Argentina, Nigeria, and Zimbabwe. The devaluation of the Nigerian fiat currency and inflation led to such high use of Bitcoin that the government banned it. In desperation, people from that West African country consulted the word Bitcoin on Google searches at historical levels.

Bitcoin is trading at around USD 44,741 and has accumulated a 6.0% gain in the last week. Its daily trading volume is above USD 24.91 billion, and its market capitalization is about 842.10 billion, according to CoinGecko.

By Alexander Salazar

Gasoline and electricity prices are likely to rise if oil picks up. There are mining farms that currently work with renewable energy. There is no fear of an increase in crude oil.

The effects of wars always extend their tentacles over those who have the least to do with those conflicts. In the case of the current war conflict between Russia and Ukraine, Western countries receive collateral damage.

A curious case is that of the US, where gasoline has reached a high peak due to increased oil prices. What is concerning the most is that electrical energy could also face the same impact, which would be harmful to Bitcoin mining.

The United States of America, although it is a producer of crude oil, is also a large importer of oil. In general, this raw material is subject to rises and falls in its price due to the basic rule of economics and trade, which is supply and demand.

Russia is the ninth nation that exports the most crude oil to the US, which sent just over 90,000 daily barrels to that nation in December, and one of the leading sellers of oil to the European sector.

For the most part, these nations showed a rejective stance on the actions of President Vladimir Putin and his invasion of Ukraine and, therefore, decided not to continue buying oil from the Eurasian nation. The United States of America did the same thing, which banned the import of fossil fuels from Russia a few days ago.

This action led to a significant demand for oil from the Organization of Petroleum Exporting Countries, led by Saudi Arabia, which severely increased the crude price of this administration.

The United States of America purchases millions and millions of barrels of oil from the organization; for this reason, the North American country needs to invest more to obtain the crude that supplies the entire North American national industry.

The oil by-product improved in the large refineries in the southern United States of America gets stored and measured through pipelines to the more than 50 states that the whole nation. In California, in the eastern United States of America, maximums of USD 5.44 reached almost a gallon of gasoline.

Electricity gets Produced, Primarily by Fossil Sources

In that nation, there are thermal plants focused on processing oil. There are steam turbines that convert thermal energy into mechanical energy, which then work as a kind of electric generator.

Local oil gets usually consumed, but imported oil also plays an important role. More than 22 million barrels of crude oil get consumed in the United States of America.

For this reason, there could be high peaks in electricity consumed in the United States of America due to the war. Oil, traded in a global commodity market environment, would play a significant role if the cost of living in the US rose.

By: Jenson Nuñez