The political uncertainty in the Middle East reached an unprecedented peak, with Saudi Arabia arresting the world's richest Arab. Alwaleed bin Talal. Could this lead to a shift to Bitcoin, the digital refuge in the Middle East?
The Repression of Saudi Arabia
Saudi Arabia has undertaken a broad crackdown, formally against corruption. . King Salman ordered the arrest of high princes and ousted many senior officials from their ministerial duties. The list of those arrested includes Prince Alwaleed bin Talal, the richest Arab in the world.
Prince Alwaleed was recently in the media for his negative views on Bitcoin, saying that Bitcoin would face a collapse of Enron. While King Salman explains the reasons for his arrest for corruption, many commentators believe that the king could pave the way for his son, Crown Prince Mohammed bin Salman, to take over from the king.
In early June, Qatar's neighbors – Saudi Arabia, Egypt, Bahrain and the United Arab Emirates blocked the country, accusing the country of harboring Islamist militants and maintaining a relationship with Iran. resolute enemy
Qatar is a small country in the Middle East with large reserves of natural gas. According to the World Bank, it is the country with the highest GDP per capita based on purchasing power parity ($ 127.5 K in 2016). It will also host the 2022 FIFA World Cup.
Many believe that the real reason why Qatar's neighbors are blockading is Qatar's support for Al Jazeera, a news organization that broadcast opinions contrary to the established position. Middle East. Given the absolute power of the Middle East governments, an independent news channel in the region has raised many obstacles.
Bahrain on the brink of collapse
Bahrain is one of the smallest economies in the world. the oil-rich Middle East, with its GDP five percent the size of that of Saudi Arabia. Its economy is dependent on oil and the recent lull in oil prices has caused tension in its economy.
The Central Bank of Bahrain indexed its currency to the US dollar (0.376 Bahrain Dinar = 1 US dollar). this has been put to the test with the decrease in foreign exchange reserves. According to Bloomberg, Bahrain has asked Saudi Arabia to help avert a financial crisis and imminent devaluation. The devaluation of the currency in Bahrain would trigger a contagion effect in the Middle East, where most of the currencies are indexed to the US dollar
Bitcoin rises when governments screw up
or l & # In the monetary area, people are trying to find shelters for their wealth. Traditionally, this has been gold, but Bitcoin is rapidly developing as an alternative security haven, with its decentralized and borderless nature.
The Middle East is strategically important, both because of its vast reserves of oil and natural gas. the enormous wealth of its citizens. If the rich sheikhs of the Middle East think that parking a fraction of their wealth in Bitcoin makes sense given the uncertainty in the region, the price of Bitcoin could reach new heights.