Today’s Cash Rate is the lowest in Australian history. Where will Aussies find their next ‘savings safe haven’?
With Australia officially in recession as of September 2020 there is little chance of a rapid bounce back into black as today the Reserve Bank of Australia have announced their decision to maintain the record low Interest Rate of 0.25%.
There’s no comfort knowing Australia isn’t the only economy to shrink this year, with many advanced economies also dropping between 7-21% in 2020.
This global economic anomaly has left many Australians wondering for the first time in their lives if owning AUD will hold value early in the 2020s.
Binance Australia CEO, Jeff Yew said there has been an influx in Australians looking to explore alternative stores of wealth to avoid the uncertainty of a lagging national economy.
“Since launching Binance Australia in July 2020, we’ve seen enormous uptake in the use of Binance’s crypto trading platform across the nation with sign ups increasing 220% in Q2 compared to Q1,” Jeff said.
“We don’t think it’s a coincidence that our success in Australia has occurred at the same time as the turbulence experienced by Australia and the Aussie Dollar in 2020. There is a growing understanding of cryptocurrency, and a growing belief that the likes of Bitcoin have a critical role to play in the fiscal world of the 2020s.”
While many made and lost fortunes trading Bitcoin during the rollercoaster that was the 2017 Bitcoin rally, Mr Yew believes as the cryptocurrency matures, so will its function as a store of wealth rather than just a punt.
“Our government has been proactive in attempting to stave off an economic slump, but the reality is that many international economies won’t just bounce back to pre-COVID performance,” Jeff said.
“This begs the question if holding $10,000 in the bank today is going to be worth the same amount by 2025 and beyond. It also positions cryptocurrencies – currencies that are not tethered to any nation’s economic performance – as a key consideration for those looking to hold their money’s worth in the next five to 10 years.”
The notion that Bitcoin could be used as a hedge against stifled economies has been gaining traction as the value of Bitcoin in AUD has grown by over 50% YTD (110% since March 2020) in a market that has experienced record losses.
“What we’re talking about is a unit that shares a lot in common with Gold. It’s finite, universally recognised, liquid, and today there is a massive digital infrastructure facilitating the ownership and exchange of cryptocurrencies,” Jeff said.
“I believe there is a real case to be made for cryptocurrency to be the gold of the 21st Century, and the market is beginning to show that, too.”