8Cryptocurrency is a type of digital or virtual currency that uses cryptography for security. Unlike traditional currencies issued by governments (like USD or INR), cryptocurrencies are decentralized and typically run on a blockchain — a distributed ledger that records all transactions transparently.

Examples include:

• Bitcoin (BTC)

• Ethereum (ETH)

• Tether (USDT)

• BNB, Solana, etc.

Most cryptocurrencies operate peer-to-peer, meaning they can be transferred directly between individuals without the need for a central authority like a bank.

How Does Cryptocurrency Affect the Global Market?

✅ 1. Financial Inclusion

Cryptocurrencies provide financial services to people who are unbanked or underbanked, especially in developing regions.

✅ 2. New Investment Avenues

They have created new markets and asset classes, attracting both retail and institutional investors seeking diversification and high returns.

✅ 3. Disruption of Traditional Finance

Decentralized finance (DeFi) platforms are challenging traditional banks by offering loans, trading, and interest-bearing accounts without intermediaries.

✅ 4. Volatility & Speculation

Cryptocurrencies are highly volatile, which can impact global markets and investor sentiment. Sudden changes in crypto prices can even affect the stock markets.

✅ 5. Cross-Border Transactions

Cryptos allow for fast and low-cost international transactions, reducing reliance on traditional banking systems and SWIFT.

✅ 6. Regulatory Influence

Government decisions to regulate or ban cryptocurrencies (like in China or India) can cause ripples in the global financial ecosystem and impact local tech innovation.

✅ 7. Emerging Digital Economy

The rise of NFTs, metaverse platforms, and tokenized assets is reshaping digital ownership and commerce globally.