Why many are transitioning to cryptocurrency

In a world filled with payments using credit cards and dead presidents on pieces of paper, why choose digital code for currency when it isn’t backed by anything?

To understand the rationale behind investing in cryptocurrencies, we must first dissect the broader macroeconomic picture.

The world’s economy runs on a fiat-backed monetary system equivalent to quadrillions of USD. However, only $36.4 trillion USD of it is in physical form, also known as “narrow money” that includes bank notes and coins deposited in checking and savings accounts. If you consider the “broad money” (which includes the totality of assets that households and businesses can use to make payments or to hold as short-term investments such as currency, funds in bank accounts and anything of value resembling money*), the total is around $90.4 trillion USD.

But we’re just getting started.

The money invested in derivatives is at least $544 trillion USD with some estimates at $1.2 quadrillion USD. The stock markets, in comparison, contain a measly $73 trillion USD. Furthermore, commercial real estate investments are nearly $30 trillion USD.

On top of that, total global debt totals about $230 trillion.

Let that sink in.