Bitcoin reached all time highs worldwide. It recently broke through 100 million Won in Korea, and it seems it’s not stopping anytime soon. Bitcoin is becoming a household name. It has the potential to reshape the financial landscape. And I believe it also has the potential to play a role in solving Korea’s most critical problem.
Ever since the U.S. Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs, the gates have opened for mainstream adoption, making it clear that there is incredible demand for this digitally native, decentralized asset. The US ETFs alone, on an average trading day, buy 10 times the daily issuance of new bitcoin. With US ETS approved, the UK and HongKong ETFs on the horizon, and South Korean authorities discussing whether to allow the sale of spot ETFs, it seems Bitcoin is making its grand entrance into the global financial system.
One of the main drivers of Bitcoins growth is the continuous loss of purchasing power of currencies worldwide. As in any other country, prices keep rising in Korea. The ever increasing cost of living is crushing low and middle income households. With good intentions money is being pumped into the economy, hoping it will help. But all this does is make the currency worth less and less, which only makes things worse. Inflation hurts low-income families the most. They hold a high percentage of their money in cash to pay the bills, which loses value as prices rise. Meanwhile, the assets owned by high-income families, like stocks and real estate, go up in nominal terms. So the poor are seeing their purchasing power erode, while the rich are getting richer on paper, widening the wealth gap.
"The reason society is suffering the way it's suffering is because we built it on a monetary premise that's fundamentally flawed." - Lawrence Lepard
The debasement of currency forces people with excess cash to find ways to store that value. People invest to stocks and lend their money to companies in the hope they will be more productive with that money than they will be themselves. Other people buy real estate to play the inflation game to their advantage. But this all comes at a cost. You have to stay up to date with financial markets and the decisions the companies you invested in, and their competitors make. In Real Estate you have to deal with occupancy, property maintenance and other landlord duties. The average hard working family should not have to speculate and deal with these things only to store the wealth they already earned.
"As money, Bitcoin achieves two objectives; it's both a unit of transaction as well as being a store of value. The U.S. dollar, for example, is a unit of transaction, but it is not a store of value." - Max Keiser
Bitcoin has the potential to level the playing field by serving as both a currency and a store of value. One that can not be debased. As more people start using it, the wild price swings should calm down. Then, average folks won't have to jump through hoops to protect the value of their hard-earned money. With Bitcoin being the go-to for storing wealth instead of real estate, apartments slowly lose their monetary premium and prices slowly drop to their utility value. In other words, the price tags won't be so artificially inflated by people parking their cash in properties. This means that first-time buyers and lower income families would finally be able to afford a place to call home again.
House prices are just one example of the benefits of hard money. Imagine a world where your money actually grows in purchasing power over time, rewarding your hard work and financial responsibility. A world where the rapid rise in productivity pushes all prices down to benefit everyone. A world where people feel the system is working for them, not against them. Suddenly, the dream of saving up for a house and starting a family feels achievable again. Young couples can plan for the future with confidence and optimism. Being able to dream about a better future gives people hope. Hope could be what Korea needs to turn the tide in its demographic challenge.
