There is a lot that could be said here, but I do agree with you that low interest rates will drive investors to seek out other investment vehicles including crypto and metals.
For example, the fact that it is an actual cost to keep money in a traditional savings account in Japan has moved investment into other areas, and it's likely one of the driving factors behind why Bitcoin was legalized there. Japan has been struggling to jump start their economy for far too long and crypto seems to be an area they are placing a bet on to drive it.
Well, the reason why the Japan is struggling to jump start the economy is because the country is suffering from deflation. People are hoarding cash because it makes sense to hoard, the value of your money is growing by hoarding. In an economy that values efficiency more than anything else, the unwilling to spend by the japanese people could be a way to remove "unvaluable" companies that waste resources. Spending for the sake of spending is just wasteful.
I see crypto as an alternative to move away from the systematic problem created by the inefficiency of money.
Right, deflation has been a major cause which has made everything from savings accounts a cost and Japanese Government Bonds nearly valueless.
There is also cultural context to why the Japanese are either willing to pay to have a savings account, maintain cash, or invest in low yielding bonds. There is tremendous risk aversion. One part is due to the post 80's stock market crash in Japan which convinced many that these markets are like casinos and you can only lose. Second many refuse to invest in foreign assets because there is the risk of exchange rates not working out in their favor. Third, Japanese Government Bonds are 'safe'.. again playing on general risk aversion. All of these ideas largely play to the older generation I believe.
Diversification was just not part of their strategy so crypto is a way to reset that mindset. And, I mean if you look at the crypto trading volumes now, Japan makes up a significant percentage. So perhaps that cultural shift is happening and legalizing Bitcoin is only going to help shake up that old school mindset.
So yes it seems Japan is starting to do exactly what you were initially asking about. Diversifying away from just Fiat :)
Sorry if that was a bit lengthy but happy to read your views and discuss more at any time of course :)
Well, I'm happy to discuss at length to learn more and to truly understand the real value of cryptocurrencies. Honestly, I'm more than willing to trade all my fiat for cryptos only if there are wider adoption and demand for them.
Let me try to make sense of your explanation to reevaluate what I've already understood.
I would assume you are talking about the opportunity cost of money. Capital that is not being put to productive use is essentially worthless. And because there's no actual demand for real value added technology in Japan which is why the government bonds are not valuable. The only way the government is supposed to meet the debt obligation is to simply print more money (inflationary) or charge a fee for holding onto money (deflationary). Besides, it cost plastic, ink, machines, and paper to print new money.
I feel that risk aversion is just a small part of the bigger picture. There's just no incentive for the older generation to change. If my fiat is still accepted and is more liquid than Bitcoin, then why should I be motivated to use cryptocurrency?
What you are arguing is a speculator mindset instead of using cryptocurrencies as real money. Cryptocurrencies are inherently valuable as a means of exchange and the value shouldn't be derived from their exchange with fiat. Essentially, if you can continue to buy goods using cryptocurrency without constant fluctuation in the price of goods, you shouldn't really care much about how Bitcoin is trading with Yen, or Bitcoin trading with US dollars.
I agree that the cultural shift is happening because the younger generation has no way to get their hands on fresh money. The old people are hoarding their cash and there are more old people than young people. To store physical cash, you need a vault, which of course is going to cost you some electricity and security guards.
Overall, I would say that cryptocurrencies are more efficient than the traditional fiat currencies. It's the efficiency of money which is why people are gradually moving towards crypto.