Why Bitcoin? Central Banks Forces Negative Rates on Consumers

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For many investors in traditional markets, the “why” of Bitcoin is rather nebulous.

From the anecdotal evidence I have heard, these cynics see the cryptocurrency as some worthless digital counterpart to gold at best and a tool for only criminals, terrorists, and crazy hackers at worst.

They may question the sentiment that Bitcoin is software and thus presumably fallible, bring up the idea that cryptocurrencies are some evil ploy by hostile states to overtake Wall Street, and so on.

Bitcoin vs Dollar

But, it is these traditional investors that are getting a taste of why Bitcoin is needed in today’s economy. Read on.

Charged to Lend Your Money

For the few hundreds of years that banks have been integral to human society, one thing has been understood: When you store money in a bank, which is effectively a loan, the bank should pay you.

After all, the whole business model of banks is that they get deposits, lend out those deposits for interest payments, and fork out some interest to customers for playing an integral role in this oh-so virtuous cycle.

But, this has changed over the past decade. What once was presumably impossible is now a cruel reality for millions the world over. This cruel reality is negative interest rates.

For those unaware, this means that the bank charges you for lending it your money, promoting spending or the hoarding of fiat cash to avoid getting your capital siphoned away with time. Adam Smith and John Maynard Keynes are probably rolling over in their graves.

A prime example of this is from a financial institution in Denmark. As Bitcoin proponent Rhythm pointed out on Twitter, a bank in Denmark is charging investors with over $111,100 in their bank accounts.

Bloomberg has confirmed this. In a report published on Saturday, the outlet wrote that Jyske Bank A/S, Denmark’s second-largest listed lender, “said it had no choice but to impose negative interest rates on all private customers with $111,000 or more.”

While it isn’t clear how many consumers are affected, there are likely thousands that are watching their wealth drip away with this new rule in place.

Hodlonaut, a legendary Bitcoin industry commentator, broke down why he believes negative interest rates are effectively the straw that will break the camel’s back.

Your income is taxed, your assets are taxed, everything is with time taxed via inflation, and then you slowly watch your capital evaporate because of negative interest rates. Crazy.

Bitcoin Fixes This

Prior to the past decade, there was only one solid way to store one’s wealth: precious metals. Gold, for instance, has been a valuable metal for thousands of years, finding use as both an industrial good and as a “shiny object” that humans have grown to love and crave.

While the metal is subject to price variation due to the natural cycles in markets, in the long run, usually when viewed with a lens of 10 years+, gold has always moved higher in value.

But there’s a new contender on the field. This contender, if you haven’t guessed it already, is Bitcoin. Unlike banks, Bitcoin, which many say is the perfect way for a consumer to “become their own bank”, you being a HODLer of BTC doesn’t subject you to negative interest rates. Bitcoin is unconfiscatable, decentralized, non-sovereign, immutable, censorship-resistant, global, public, and even more scarce than gold.

This had led many to say that in a world dominated by negative interest rates, it should only shine. As Travis Kling, the chief investment officer of Ikigai, has said on multiple occasions, “Bitcoin is like a CDS against fiscal and monetary policy irresponsibility”.


I am a writer who has been following the cryptocurrency space since 2013. My insights and interviews have been featured in leading publications in the industry such as LongHash, NewsBTC, and Decrypt. When I am not writing, I work as a team member of the EXODUS division of HTC, a Taiwanese electronics company. I own a small amount of Bitcoin. Contact

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