The coronavirus emergency is triggering not insignificant consequences for the world economy. There is a parallel economy that would instead continue (and the conditional is a must) to continue on its path without too many hitches. We are talking about Bitcoin: cryptocurrency, according to some experts, represents an investment capable of protecting the portfolio from the so-called "black swans" and could therefore be a refuge for the investor if the new virus continues to spread in space and time. The possibility that the bitcoin system gets stuck in the cul-de-sac of the recession seems more remote. Why? We asked Christian Miccoli, pioneer of online banking in Italy, founder and former President of "Che Banca!" and from 2015 founder and Co-CEO of Conio, an innovative startup operating in the fintech sector (founded together with Vincenzo Di Nicola) that allows you to approach the Bitcoin world with ease through an app.
“Bitcoin - says Christian Miccoli - does not belong to any country. The algorithm behind the system was created so that a total of 21,000,000 Bitcoins are produced. With traditional currencies, however, the money supply is influenced by central banks. Every time one of these enters liquidity on the market, the purchasing power of the currency itself decreases. Furthermore - continues Miccoli - Bitcoin is unrelated to traditional markets.
For the latter, in fact, one of the main movers are central banks: when black swans such as Covid-19 occur, they are forced to intervene influencing the performance of the stock and bond market. Bitcoin moves according to different logics: since the quantity of money is regulated so that no more than 21 million Bitcoins are generated, its value depends only on market demand. The fact that Bitcoin is unrelated to traditional markets makes it an excellent asset also to diversify an investment portfolio ". The possible horizon of a crisis has generated much uncertainty about spending and investment decisions but has not produced particular movements on the cryptocurrency, so far. "Making a more general discussion - affirms Miccoli -, the tension of the financial system with which we live (with a world GDP of 60 thousand billion dollars and financial assets of about fourfold) represents a fragile balance that small, or large, black swans that cyclically appear on the scene, risk to blow up ". Central banks have decided to try to calm the situation by introducing more liquidity.
According to Christian Miccoli “the effects of these maneuvers risk leading to a further weakening of the system, increasing the risk of inflation and financial bubbles. On the contrary, Bitcoin, being a scarce commodity like gold, is an excellent store of value. " The cryptocurrency represents the only tool that allows you to make a real transfer of money and not credit (as happens in the case of payments by card or bank transfer intermediated by traditional banks), is characterized by a fixed offer, while the demand depends on factors different but which are not related to what happens to traditional asset classes. What is certain is that, in addition to being useful because it allows diversification of portfolio risk, Bitcoin is about to face a new halving, a phenomenon that occurs every 4 years and which, in the past, has always brought very positive effects on its value. It is natural that cryptocurrency is also not entirely immune from risks and consequences.
"Phenomena such as the Coronavirus alarm - says the CEO of Conio - polarize a lot of attention, with the consequence that in the short term investors tend to stop. It's a panicked reaction. The Bitcoin market is also made up of investors, and in a moment of 'collective hysteria' it is difficult to predict what will happen in the short term. This currency can be a refuge and the expectation is that in the medium term it will remain stable or increase in value, but we obviously cannot predict what will happen in the coming days ".
