But whether you like it or not, immigration is a part of our society.
Immigrants are just normal people trying to earn an honest living. They want what we want: a good life. That means holding a job, owning a home and supporting their family.
And many immigrants have family that still live in their country of origin. Just like you and us, they want to take care of that family. And typically, that support is financial in nature.
But it’s not easy to financially support loved ones in a foreign country, with foreign economies and foreign currencies.
That’s why it’s so important for immigrants to find the fastest, most cost-effective way to send money from one country to their country of origin. This process of moving money from one country to another is known as remittance.
Global remittances totalled $575 billion in 2016. And developing countries are easily the biggest market, accounting for $429 billion of that total.
39% of the world’s population don’t have access to a bank account.
Have you ever thought about how hard it is to send money to someone who doesn’t have a bank account?
It’s hard, very hard. And that’s why many global remittance companies charge astronomical fees.
However, companies need remittance, otherwise it becomes extremely difficult for money to flow between countries. Typically, remittance is the part of the market the big banks don’t touch. It’s not economical for them. And it’s why companies such as Western Union and MoneyGram have become so profitable, because that’s their primary business.
There are significant risks in remittance. These risks are why banks are wary when it comes to this market. A major risk in the remittance industry is money laundering and criminal financing.
Remittance companies often have to operate outside of formal banking channels, in channels that aren’t as secure. Remittance can be bothersome for banks, so they don’t bother with it. And the incumbents like Western Union and MoneyGram have become so bloated on profits from excessive fees and charges, that they’ve created a niche market for new fintech companies who can do it all more securely, faster and cheaper.
And one of the biggest changes to the remittance market is the leveraging of blockchain technology. Blockchain technology doesn’t need a bank or an intermediary to transfer wealth. It’s instantaneous, low cost, and it’s incredibly secure.
It’s a game-changer for the remittance industry.
So what next for bitcoin cash?
Well that happened fast! After the SegWit2x bitcoin fork was called off, bitcoin cash went on a price rampage.
From around US$350 on 27 October, bitcoin cash soared to a high of over US$2,400 on 12 November. It has now settled back around US$1,300.
That’s one heck of a rollercoaster. And the reason is that there’s been a concerted effort to pump bitcoin cash as the “payments” and “original vision” version of bitcoin. Meanwhile, the bitcoin we know today is the “gold” or “store of value” version of bitcoin.
When the bitcoin cash fork happened, we recommended you just hold on to your bitcoin cash and see what happens. As we said on 2 August,
Look, it really is free money. You’ve got nothing to lose by selling it. You’ve got nothing to lose by holding it.
We then went on to say the following week,
I’m not actively recommending you buy more bitcoin cash. However, I am advising that if you now have bitcoin cash, sit and hold on to your coins long term.
Eventually one may prove to be more valuable than the other. Or both may prove to have their strengths and exist in the long term as valuable propositions.
Our view hasn’t changed. We are still not actively recommending bitcoin cash and won’t be in the near future. But if you have some because of the fork in August, then continue to hold – see what happens.
If the whole crypto market heads the way I think it will long term, then it’s possible both bitcoin and bitcoin cash might be exponentially more valuable than they are today.
But of course we don’t have a crystal ball. We still don’t know how this will all play out.
But we anticipate both will likely stick around for some time to come. And remember, if you got bitcoin cash in the fork, then it’s really free money. You can do with it as you please.
But we think it’d be prudent to follow how both develop and fulfill their aims long term.
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