As Coindesk reports, new academic research has found that the price of bitcoin is higher in countries with lower degrees of economic freedom.
In his paper, Robert Viglione, a PhD student at Darla Moore School of Business in South Carolina, notes that investors in repressed countries have bigger incentives to invest in the digital currency.
Bitcoin's decentralised and open-source nature, Viglione says, affords it the ability to trade and transmit funds across borders with few barriers or transaction costs, hence allowing the digital currency to behave as a disaster asset for people in politically unstable environments.
Countries with capital controls, unstable prices, trade barriers or little financial freedom, he says, would be prime candidates for bitcoin as investors undergo a higher degree of asset confiscation and are less likely to move funds outside of the government controlled currency and their political jurisdiction.
Viglione asserts that there is also a connection between high corporate tax rates, total tax burden and the premiums that investors are willing to pay for bitcoin.
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In his paper, Robert Viglione, a PhD student at Darla Moore School of Business in South Carolina, notes that investors in repressed countries have bigger incentives to invest in the digital currency.
Bitcoin's decentralised and open-source nature, Viglione says, affords it the ability to trade and transmit funds across borders with few barriers or transaction costs, hence allowing the digital currency to behave as a disaster asset for people in politically unstable environments.
Countries with capital controls, unstable prices, trade barriers or little financial freedom, he says, would be prime candidates for bitcoin as investors undergo a higher degree of asset confiscation and are less likely to move funds outside of the government controlled currency and their political jurisdiction.
Viglione asserts that there is also a connection between high corporate tax rates, total tax burden and the premiums that investors are willing to pay for bitcoin.
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