COVID-19 has affected world economy severely. Central banks are printing unlimited money to support their nose-diving economy. Millions of people lost their jobs and are forced to stay at home. Economists are fearful of hyperinflation and another great depression. Nepal is also affected by Coronavirus. Can Nepali economy escape this nightmare?
Land and housing market may fall within next 6-12 months. Fiat currencies are at the edge of hyperinflation. At such time, history shows people prefer gold or other precious metal. And now many people have another option, Bitcoin. But bitcoin trading is illegal in Nepal. Handful of nepali people are buying bitcoin via extremely risky P2P markets like localbitcoin.com. In this article, we will predict the year when bitcoin will be legal in Nepal. We will also guess at what price Nepali people will buy Bitcoin when it becomes legal.
|Technology||Started in US||Started in Nepal||Gap(yrs)||Log||Major Event||Stability|
Analysis these data, we can derive following information:
- Nepal introduced new technology faster when political situation is unstable.
- The 30-year long trend of bringing new technology faster got broken with Bitcoin. Bitcoin should have been legal in Nepal between 2015-2020 to match this trend.
- Average gap in bringing new technologies for US to Nepal is approx. 27 years. So we predict Bitcoin will be legal by 2036.
- But if country turns unstable, bitcoin might get introduced to Nepal sooner. COVID-19 can be one of the reasons to make Bitcoin legal in Nepal faster than expected 2036. Since the impact of COVID-19 is in the scale of Great Recession or World War II economy, data shows that this predicted 27-years gap can decrease to 16.2-years which will be roughly 2025.
Hence, Coindesk Nepal predicts Bitcoin will be considered legal in Nepal by 2025. Applying S2FX model of Bitcoin, legal Bitcoin price in Nepal might be in the high of $288k (currently NPR 34,839,360.00). At such time, general Nepali population can only afford less than 0.0108 Bitcoin (currently Nepal has $3,110 PPP).
It is true that some Nepali people have bought bitcoin earlier like in 2013. Following that technology growth, Nepal Government should have done better research over time and legalize bitcoin between 2015 to 2020.