Cost of living in Madrid, inflation, and Bitcoin ATMs all have one thing thing in common

What is a Bitcoin ATM?

Bitcoin ATMs scattered around Madrid are devices that can be found not only in separate premises, but also in shopping malls. They owe their popularity to their extremely intuitive operation and ensuring the safety of investors.

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Advantages of using an ATM in Madrid

One of the best advantages of Bitcoin ATMs is that they allow you to buy cryptocurrencies easily and quickly, both for beginners and more experienced users. Other advantages of Bitcoin ATMs in Madrid are:

• Availability

They are also available 24/7, which can be convenient for people who cannot get things done during traditional office hours. In addition, Bitcoin ATMs are often placed in strategic places, such as airports, train stations or shopping centers, which makes them easy to access.

• Security

Bitcoin ATMs are one of the safer ways to buy or sell cryptocurrencies as transactions are made over a secure network connection.

• Speed

Bitcoin ATMs allow you to quickly buy or sell cryptocurrencies. Almost 90% of bitcoin transactions do not take even a few minutes.

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How does the Bitcoin ATM in Madrid work?

Bitcoin ATMs in their operation do not differ much from traditional ATMs. The scheme of their operation is equally simple. Especially for you, we have prepared a short instruction manual on how to buy and sell cryptocurrencies in a Bitcoin ATM. You can read it in the article How to Buy or Sell Crypto at Crypto ATM.

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Impact of cryptocurrencies on the environment

Cryptocurrencies and inflation were supposed to be in a close relationship - when inflation rose, cryptocurrencies were supposed to become popular. The result of this affair was to protect capital from rising inflation. This is what industry experts and economists predicted before the current economic situation. However, what is the current situation?

With inflation rising at the fastest rate in decades and the value of cryptocurrencies dropping, this relationship has been questioned. Some industry analysts are wondering about the role that cryptocurrency plays in a world where high inflation persists and whether there actually is any one golden way to invest without the risk of loss.

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Bitcoin as a substitute of the euro?

Many cryptocurrency fans in Madrid often think of Bitcoin as a digital substitute for the Euro, and in some ways it is. Not every coffee shop accepts Bitcoin or Ethereum, but cryptocurrencies are gaining popularity as a payment method.

Several high-profile retailers in Madrid already accept cryptocurrencies, and it is quite possible that the number of businesses accepting digital currencies will only grow. If inflation reduces the value of the euro over time, people often look for assets that can consistently outpace the increase in inflation.

The huge interest in cryptocurrencies in a year like 2021 has led some people to believe that digital assets can serve this purpose. Many investors are already doing this with gold, commodities and other investment asset classes. Instead of investing in traditional and alternative investments to build and store wealth, an investor can buy cryptocurrency at an ATM in Madrid in the hope that its value will increase – making it less vulnerable to fluctuations in the euro exchange rate.

However, we must remember that virtual currencies are not real money (they do not work within the traditional banking system) and this is undoubtedly their greatest advantage.

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Is investing in a Bitcoin ATM in Madrid similar to investing in precious metals?

Assets such as bitcoin, which are predetermined in quantity and nature, are considered commodities in the same way as gold and silver. Although digital resources instead of physical ones, they work on the same principles. There is a certain amount of bitcoin that is determined by the asset algorithm, just as the amount of gold that can exist is determined by what is in the ground.

Bitcoins have no underlying value that would change the nature of the asset. Like gold, silver, iron, and wood, bitcoin is just what it is, and investors can buy, own, and sell it at ATMs for cash as the market develops.

Assets such as stablecoins, which can be generated when the underlying project sees fit, are considered securities, such as stocks or bonds. While they are not traditional assets, tokens work on the same basic principles. The underlying company creates a group of tokens and sells them on the open market. They can create new tokens or eliminate existing ones at will, and the nature of that token is determined by the nature of the underlying design.

The utility token will gain or lose value based on the business decisions made by the project that issued it, in a manner almost identical to shares. Whether a given cryptocurrency is a commodity or a security, it is not a currency. This means that it will not behave like a currency. Instead, during an inflationary period, investors should expect the cryptocurrency to follow high-risk investment grade rules.

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Financial stability during the economic crisis

In times of recession, investors seek stability. Precious metals, from the example above, generally do well in this environment, both because of the excitement and history associated with gold and silver, and because of the inherent value of the materials themselves. Gold is simply perceived as a stable asset, which is why people seeking stability invest in it, which in turn reinforces the perception of stability.

Cryptocurrencies have never become popular enough to permanently replace traditional currencies. These investments can do very well in an environment where investors have excess money and feel comfortable taking risks. This does not guarantee a great income, but it allows you to store the assets accumulated so far in inflation-resistant assets, giving investors a sense of security and making them independent of the traditional banking system.

Cryptocurrency as an asset class does not yet have a trading history during periods of inflation, so there is no data-driven way to predict how inflation will affect prices. However, investors can make some predictions based on the performance of other similarly situated asset classes. Ultimately, while crypto can still be a risk in any market condition, it is one of the surest ways to invest in times of inflation and rising prices in many global economies.

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Is inflation good or bad for the economy?

For the famous economist John Maynard Keynes, inflation in some situations is not something terrible, and it can even stimulate the economy and create new jobs during economic downtimes. Overall, a low inflation rate stimulates spending, investment and borrowing – all of which are essential for healthy economic growth. On the other hand, when inflation gets out of control, it leads to hyperinflation, causing the prices of goods and services to skyrocket, wages to stagnate, the purchasing power of the currency to drop, and the cost of living to rise.

Higher inflation reduces the value of money saved, and lower inflation slows down the economy as a whole. For example, citizens of hyper-inflationary economies such as Argentina, Venezuela and Zimbabwe must prioritize spending or else the price level will skyrocket and cause the value of money in their savings accounts to drop.

Inflation is a complex economic concept that can be good or bad, but is catastrophic when it gets too high and spirals out of control. Inflation is expected to increase further in the near future (up to 25% in Madrid) as energy costs and prices increase. 

As a result, individuals and companies invest gold, real estate and other assets to protect themselves from future inflation. Over the past decade, bitcoin and cryptocurrencies have shown that, like these assets, they also act as a sure-fire investment during periods of inflation. That is why Bitcoin ATMs in Madrid are growing in popularity.