Is COVID 19 Opening UP a New Stage for Bitcoin?

The World is going crazy these days. Much like those Sci-Fi movies that many of us have already seen, the world is fighting a war against a deadly virus that can capitulate the current economic system and plunge society into the Dark Age. While Countries are struggling to stop the threat, the virus is running around and people are getting restless. Fear is lurking in every corner, and Governments are adopting serious and heavy measures and putting citizens under quarantine.

Global markets are collapsing while sustaining heavy losses. Bitcoin seems to have been following the same path and also took its toll. People were used to the notion that Bitcoin and Cryptocurrency in general could be immune to economic crisis, but what we have learned from the current situation, tells us this is not entirely true. While some argued that this specific situation has the potential to affect all quadrants of economic life and Bitcoin was no exception, others say that Health crisis had the potential to ruin much more than economy itself.

Economic Downfall

Back in 2007, a global economic crisis that shook the world severely affected many countries. Today, many of these countries are still trying to get back up on their feet, and this new pandemic is bound to be hitting them like an Atomic bomb. Nobody knows what will be the real implications as the economy is slowing down onto a point of rupture and we are in for a rough ride!

Experts say the worst is yet to come as epidemics will be far more frequent due to global warming and over population. Even so, the truth is that after dealing with COVID 19, governments around the world will need to start thinking differently. Society, you, me; will need to change as well. But will we change for the better? Let me be honest; my confidence in Humankind died years ago, so I cannot answer to that question.

Bitcoin or Gold?

Bitcoin was certainly not immune to this whole shake. People are panicking, and where there is panic there’s a lot of unpredictability. Nobody knows for sure what caused this huge dip but it is more than obvious that is indirectly tied to all the events currently happening around the globe.

Once again, voices are saying this is the end of Bitcoin, but traders keep hoarding Bitcoin at an incredibly low price as we already see signs that the price is stabilizing.  

Contrary to Bitcoin, Gold didn’t come crumbling down to about half of its recent all-time high. It had some downward movement but quickly regained its pace and is now seeing a 7% increase since the beginning of 2020, once again proving that it is still the preferred safe haven for investors and people trying to outrun an economic crisis.

In a way, we can correlate the behavior of both assets by just by looking at something that is common to them. I’m talking about both assets being a safe haven. Despite Bitcoin having had a sudden crash of more than 40%, it rapidly stood up and went up more than 25% in a matter of days. Gold behavior was pretty much about the same; it had a 7% crash but it quickly recovered without having much of its volume affected.

Both assets have proven to be a safe haven, so if I was to have to decide between the two, I would certainly spread my stash between the two!

Cryptocurrency or Cash?

Cash has always been dirty. It travels from hand to hand and it carries all the germs, microbes and virus with it. COVID 19 has pretty much made everyone aware about this. Even governments are now advising people to avoid cash as it can be a contagion driveway.

While all of this is happening, a new stage for cryptocurrency is set, and while cash may not disappear so soon, the chances of it going to the background are getting higher and higher. Nevertheless, credit cards are still the preferred alternative to cash, however, it seems that there is now an new opening for cryptocurrency to emerge into our day to day deeds, because rather than Credit Cards, it is the only option that can actually behave like cash.

Since the Forties we have seen the rise of credit cards and digital money. Today, most of payments are made with other means of payment other than cash. So, are we going to see Governments and banks taking this as an opportunity to introduce a new digital means of exchange? Probably yes, but in regards to that I don’t think that cryptocurrency will be the choice. Or if it is, it will most likely be a centralized version of Bitcoin.

(Hi there guys! This is my first post, so I hope you enjoy. Leave your comments and let me hear your thoughts!)

References:

https://www.scientificamerican.com/article/destroyed-habitat-creates-the-perfect-conditions-for-coronavirus-to-emerge/?utm_medium=social&utm_content=organic&utm_source=facebook&utm_campaign=SciAm_&sf231648028=1

https://www.politico.com/news/magazine/2020/03/19/coronavirus-effect-economy-life-society-analysis-covid-135579

https://www.wfmj.com/story/41843826/the-covid-19-coronavirus-and-its-impact-on-gold-prices-in-2020-discussed-by-daniel-fisher-of-physical-gold

https://www.investopedia.com/articles/economics/09/financial-crisis-review.asp

https://cointelegraph.com/news/3-reasons-last-weeks-epic-bitcoin-price-crash-has-a-silver-lining

https://www.thebalance.com/history-of-credit-cards-4766953