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I don't understand this. If they buy BTCINR, they will hold and own BTC, BTCINR will go up, and USDBTC will go down (ever so slightly, or not at all) due to sta
by csee 5y ago
I don't understand this. If they buy BTCINR, they will hold and own BTC, BTCINR will go up, and USDBTC will go down (ever so slightly, or not at all) due to statistical arbitrage traders. No direct USD transaction took place. In what way are they supporting the USD? I get the separate point that BTC
itself may displace INR, but not the USD point.
- JumpCrisscross 5y ago> No direct USD transaction took place One, flight to safety. When markets crash, risk assets sell off in favour of dollars. (Yes, crypto still behaves like a risk asset.) If the rupee is selling off in favour of Bitcoin and that prompts a crisis, the rupee will enter a death spiral. Two, more potently, the world’s financial rails run on dollars. Hell, most of crypto runs on dollars. For a capital controlled economy like India’s, Bitcoin is an off ramp for converting INR into USD.
- smaryjerry 5y agoCurrently the perception is USD is safer than INR, but that can change at any time. There is no reason not to use stable coins denominated in INR if INR becomes more trusted. Imagine if the US printed 40 percent of their currency of all time in a single year leading to subsequent years of the highest USD inflation in 40 years.. which just happens to be exactly the time we are living in.
- manojlds 5y agoLot of folks do convert to stable coins like USDT and then use it for further trading. Not sure if it's a relevant point or not.