The CEO of cryptocurrency exchange Bitmex predicts that by the end of next year, at least five countries will accept Bitcoin as legal tender. He cited three key reasons for his conclusion, believing that “developing countries will jump into the crypto market in 2022.”
Alex Hoeptner, CEO of cryptocurrency exchange Bitmex, predicts that developing countries will lead the way in Bitcoin adoption. He explained his views last week:
“My prediction is that by the end of next year, we will have at least five countries accepting Bitcoin as legal tender. All these countries will be developing countries. Here are the reasons why I think developing countries will accept cryptocurrency in 2022 .”
The CEO put forward three main factors driving the adoption of Bitcoin in developing countries, and why he made this prediction.
The first factor is remittance. According to Hoeptner, in 2020, remittances will account for 23% of El Salvador’s GDP. Citing data from the World Bank, he added that the remittances received by low- and middle-income countries accounted for approximately 75% of the total global remittances. In 2020, $540 billion in remittances will reach low- and middle-income countries.
“The money must somehow find a way home,” he said. “But the current remittance system—dominated by money service providers such as Western Union—is taking away people’s right to charge them an average of 10% just to send money home the next business day.”
The second factor is inflation. The International Monetary Fund (IMF) predicts that the inflation rate in developed countries will be 2.4% in 2021 and that in developing countries will be 5.4%.
He explained that during the inflation crisis, people will seek alternatives to fiat currencies. For example, he pointed out, “As the inflation rate in Turkey climbed to well above 15% this year, the adoption of cryptocurrencies has surged. Turkey’s response was to quickly ban the use of cryptocurrencies to purchase goods and services, but the current inflation rate is 19.25 %.”
“Bitcoin solves this problem. Its supply cap is 21 million. And developed countries—and/or their people—are taking notice.”
The third factor is politics. He explained that many politicians are “skilled and shrewd, interested in positioning themselves as progressive, new-age thinkers”.
He believes that “in the next year, as El Salvador solves the problems in its promotion process, savvy politicians will think about how they can follow a similar path and how they can benefit them and their voters.” He also detailed Added:
“What El Salvador is doing is taking the first step to make similar initiatives in other countries easier to consider and accept.”
However, the CEO cautioned, “Any error in the implementation phase of these measures may harm the widespread adoption of cryptocurrencies. This is the dangerous dilemma that lies ahead.”