Bitcoin adoption: The new weather system

Last month, I stood before a class of crypto economics and projected a Bitcoin price chart on the wall. It was not to discuss the latest speculative frenzy, but to illustrate a broader point: cryptocurrency adoption now moves through the global economy like a weather system—saped by conditions far beyond the asset’s price.

The first driver is utility. In parts of Africa, South Asia and Latin America, crypto’s appeal is less about ideology and more about function. In Ghana, entrepreneurs use Bitcoin to pay suppliers abroad without facing double-digit remittance fees. In Argentina, it serves as a hedge against a peso in freefall. In Lebanon, stablecoins have become a lifeline for savers locked out of their own banks.

Macroeconomic stress is a potent accelerant. High inflation, capital controls and weak institutions tend to produce fertile ground for decentralised money. Where official channels are distrusted or dysfunctional, people seek alternatives—even volatile ones.

In richer countries, the motivation is different. There, Bitcoin functions more as a “hard” digital asset—akin to gold—and as a portfolio diversifier uncorrelated with traditional equities and bonds. For investors in New York, Frankfurt or Tokyo, the case is less about escaping inflationary collapse than about hedging against financial-market turbulence and monetary-policy surprises.

Trust matters too, and here regulation plays an outsized role. The EU’s Markets in Crypto-Assets regulation (MiCA) has given European exchanges the confidence to scale, while China’s blanket ban has pushed activity into the shadows. Clear rules lower perceived risk for consumers and corporates alike; unclear or hostile regimes do the opposi

Social influence accelerates adoption. Network effects spill across borders: Nigeria’s rapid embrace of on-chain payments has been followed by upticks in Ghana, Kenya and South Africa. The availability of on-ramps—mobile broadband, licensed exchanges, fiat-crypto bridges—matters as much as the enthusiasm of neighbours.

For business, the implications are straightforward. In markets where crypto solves real payment frictions, it can increase completed sales and reduce costs. For exporters in volatile-currency economies, it can preserve margins. For investors in stable economies, it can add a non-traditional asset class with asymmetric return potential. For policymakers, ignoring it is like facing hurricane season without a forecast.

Prof. Ilan Alon Photo: Courtesy

Crypto is unlikely to replace national currencies wholesale. But it is routing around inefficiency in much the same way that water finds the easiest downhill path. Mapping those flows—utility gaps, macro stress points, trust signals and regional spillovers—will be essential for firms, governments and investors that wish to harness, or at least withstand, the coming storms.

Prof. Ilan Alon is a professor of Business and Economics at Ariel University and an expert on international economics and cryptocurrencies.

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