A Reuters story reports that Italy’s Deputy Prime Minister has proposed the country now tax the cash and other valuables stored by Italians at safes in banks. Should this proposal to tax hidden wealth go into action, it could be yet another factor driving people to seek an alternative to store their wealth. And that alternative could very well be Bitcoin.
This news comes at a convergence of other economic uncertainties: the ongoing trade war between the world’s largest economies, rising geopolitical strains between other investment markets and increasing signs of yet another global economic crisis.
Matteo Salvini didn’t sound like he was joking when he made the proposal live on Italian TV late last night, saying that he had just been informed that cash and other valuables stashed in safety deposit boxes all around Italy amounted to hundreds of billions of euros. Described as “substantially hidden” wealth, he implied that the state had a divine right to be aware of this wealth, and threatened to tax those who withheld the information with a higher rate than those who were more open about the extent of their savings.
One market analyst, Holger Zshaepitz, posted a chart showing an all-time high of retail deposits in Italy, prompting analysts to say that this development “could be the best thing to ever happen to bitcoin”.
This is bullish for bitcoin ?
Italy could end up being the best thing to ever happen to bitcoin.
H/t @Ray94609549 https://t.co/TmkS7FZICl
— Alex Krüger (@krugermacro) June 12, 2019
It could be too soon to say, however. Although Bitcoin could be much harder for states to chase, and it is a market that is generally unaffected by the slumps of traditional markets, the volatility of Bitcoin and its cyclical tendency to shed up to 90% of its value could still prevent people from diving in. A collapse of fiat and traditional banking systems, however, would leave a void quickly filled by Bitcoin.
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