Iran and Russia just took a page out of Venezuela’s playbook.
Like Caracas announced on Dec. 4, Moscow and Tehran are looking into cryptocurrencies as a means of upending the U.S. petrodollar’s reign over the global oil market, Cointelegraph reported on Dec. 11.
For its part, crypto’s rise in popularity of late does make for an enticing investment choice, especially with Bitcoin’s 150% surge over the past month.
ICOs (initial coin offerings) abound as well. In fact, investors have poured in excess of $3 billion into over 200 ICOs this year, according to data from Coinschedule.com on Oct. 22.
moneymorning.com/wp-content/blogs.dir/1/files/2017/12/Putin-1-75×46.jpg 75w” sizes=”(max-width: 300px) 100vw, 300px” title=”Russia Iran” />And don’t forget the crypto futures that started trading on the CBOE options index Sunday – to be soon followed by rival derivative marketplace CME on Dec. 17.
Crypto is all the rage.
But for Iran, Russia, and Venezuela, replacing the petrodollar with cryptocurrency offers a chance at actual liberation.
Here’s what we mean by that – and how investors can profit should this international paradigm shift come to fruition one day…
How Iran and Russia Will Use Crypto to Loosen America’s Grip
Iran, Russia, and Venezuela are all major oil producers, but they’re not liberated oil producers.
Each nation is, at present, dependent on the U.S. dollar, since the global crude market is traditionally dominated by contracts in American currency.
Moscow, Tehran, and Caracas are likewise either under U.S. sanctions right now or facing them. For Venezuela, in particular, these penalties are proving to be quite painful, since the state oil company is banned from the U.S. market as well as a large portion of Europe’s. Now 80% of the nation’s population lives in poverty, reported The New York Times on Dec. 2.
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But then Venezuelan President Nicolas Maduro announced he would use cryptocurrency to combat Washington’s sanctions. Here’s why.
First, digital currency would provide a means to bypass and upend the petrodollar’s reign.
You see, cryptocurrency is decentralized – which is to say, it’s not controlled by a single entity (like the petrodollar is).
Since crypto is a common currency worldwide, there’s no need for fiat conversion when it changes hands. This would render the petrodollar obsolete, as it would negate the need to peg oil contracts to a centralized currency.
moneymorning.com/wp-content/blogs.dir/1/files/2017/12/Putin-2-75×46.jpg 75w” sizes=”(max-width: 300px) 100vw, 300px” title=”Putin Iran” />Second, purchasing and selling oil contracts via crypto would also be a pragmatic move. Cryptocurrency is bought and sold anonymously through the use of blockchain technology (the public ledger for all crypto transactions).
This perk is especially enticing for Iran, Russia, and Venezuela, as it would allow them to buy and sell oil contracts incognito. The world would be none the wiser to any “cut-or-glut” oil schemes they might try to pull off.
Indeed, it makes sense that these three countries are at least threatening to revert their oil transaction to crypto coins. They’re losing profits thanks to the petrodollar.
Should cryptocurrency actually upend the U.S. tender one day soon – especially if further sanctions on Russia or Iran are decreed – then investors will need to be ready.
Here’s how you come out on top.
Prepare Now for the Gold Opportunity of a Lifetime
Money Morning Capital Wave Strategist Shah Gilani says right now there’s not much correlation between Bitcoin and gold.
But that will soon change.
“What’s going to happen if Bitcoin keeps rising and creating positive futures trading, allowing traders and investors to be more prudent in their position-taking, is that gold will probably drift lower,” Shah says.
“Calm trading in a rising Bitcoin would elicit more commentary and build perceptions about how Bitcoin is a store of value, and how it’s more profitable to hold than gold,” he adds.
Major oil players exchanging barrels for Bitcoin would only add to this commentary.
At when this chatter erupts, investors must act.
Shah says he’d look to buy gold and gold miners as they drift lower.
“Because by the time the Bitcoin dam breaks (and it will break),” he warns, “gold will be incredibly cheap and gold miners insanely oversold…”
Read more about Shah’s crypto-centric profit plays, including his strategy to play the CBOE and CME markets, right here…
Saudi Arabia’s $100 Billion Plan to End Big Oil
Billionaires have been dumping oil stocks at a frantic pace.
Warren Buffett sold $3.7 billion worth of oil holdings, Bill Gates unloaded nearly $1 billion, and George Soros closed out multiple positions.
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