How Bitcoin Solves Growing Home Foreclosure Problem In Berlin

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In 2020, after Bitcoin briefly fell below $ 4,000, a massive price rally ensued. The cryptocurrency’s benchmark peak in February north of $ 60,000 before another crash sent the price back to its annual open.

The rally was supported by the Covid-19 pandemic and lockdown measures imposed across much of the world, the subsequent monetary policy adopted by central banks to stimulate the economy, and the consequences of these policies for fiat currencies , inflation.

Bitcoin grew on the back of a thesis, a new digital store of value to hedge against inflation and control mined by central banks. In Germany, one of the largest economies in the world, this thesis appears to be on the verge of strengthening.

According to a Financial Times report, which is part of a series covering the impact of inflation on the global real estate industry, German citizens are struggling due to rising rents. This had led a group of people to organize and collect 350,000 signatures asking the government to intervene.

Specifically, the petition will target business owners and entities where the state’s real estate assets are concentrated. Thus, forcing owners of more than 3,000 apartments to sell part of their properties to the local government at a fair price.

This expropriation process has sparked a political battle between citizens demanding fair prices, owners and shareholders of the companies that own the assets. The campaign targets Deutsche Wohnen (DW), one of Germany’s largest state-owned companies, and other industry giants.

A campaign supporter and one of DW’s tenants told the FT the following:

What does it mean that my apartment is now a commodity on the stock exchange, where the goal is to make the most possible profit for the shareholders? These questions now resonate across Berlin and beyond.

Could Bitcoin Benefit From The German State Crisis?

Expropriating private property, according to many, would have the opposite effect to that claimed by campaign supporters. This could discourage the sector and bureaucratize access to apartments and houses.

Investors are drawn to the real estate industry because, like gold, it has historically proven to be a stable store of value and an effective method of securing income in some countries. Amid the pandemic and the risk of inflation in major currencies, investors are looking to generate returns in Bitcoin and other types of investments.

Data provided by the FT report claims that this has become a growing trend in Europe where business owners are looking for the stable income that the rental business can provide. The market capitalization of this sector increased from $ 3.5 billion in 2006 to $ 85 billion in July 2021.

Conversely, the cost of renting in the region is on the rise, as shown in the graph below. The majority of the inhabitants of this market rent properties at market prices.

Source: European Commission

Many have argued that Europe could worsen its levels of social inequality, and if Germany acts on the proposal to expropriate part of its owners’ property, the country could face a crisis.

Economist Peter St. Onge offered a Bitcoin solution to this scenario where these owners could move their capital to BTC. Cryptocurrency was designed to be resistant to censorship and virtually inexpropriate by any government.

Onge estimated that the global market capitalization of savings stands at $ 300 trillion, some could quickly switch to Bitcoin to protect its value. Institutional investors have already tasted the potential of cryptocurrency since 2020.

Still, the campaign can’t force the government to comply with citizens’ demands, but could be a glimpse of a scenario Onge called the Standard Inflation Model:

() After all, remember the standard inflation model: first the public ignores it, then they laugh, then they panic. If this panic sends a whopping $ 120 trillion in savings in Bitcoin instead of gold, that would be pretty epic.

At the time of writing, Bitcoin is trading at $ 48,667 with a sideways move in the daily chart.

BTC moves sideways after a bullish surge in the weekend in the daily chart. Source: BTCUSD Tradingview

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