Bitcoin is trading above $7,000 in what a lot of people believe to be a brilliant recovery. Having dropped below $4,000 in the wake of the Covid-19 pandemic, to bounce back to this level this soon is generating a lot of interest in the world’s leading cryptocurrency.
The time for a price surge for Bitcoin is projected to still be in the future. Many participants in the crypto space are of the opinion that Bitcoin will receive greater attention in the post Covid-19 era. This is a period where the governments will tend to focus more on auditing their books and knowing the full economic impact of the marauding pandemic.
A Looming Global Recession
The talk of an impending global recession is no longer new. This has once again generated interest as to what role Bitcoin and cryptocurrencies could play within this period. Many believe that it could become a suitable alternative to the traditional money and other financial instruments that would most likely be affected by the meltdown.
The last time that the world got into a recession was before Bitcoin was created. As a matter of fact, a lot of people believe that the creation of Bitcoin was initiated by the preceding recession which happened in 2008. This belief is backed by the information contained in the hash of the very first transaction by Satoshi Nakamoto.
In a discussion with Coinstituency, CEO & founder of Coinstream, Michael Vogel explains how the 2008 financial crisis instigated a lot of resentment toward big banks and the traditional finance system. After all, according to him, the same banks that caused the crisis were subsequently rewarded with massive bailouts.
How Investors Are Looking At Bitcoin
Bitcoin was created in the aftermath of the 2008 financial crisis, and Vogel notes that one of main attractions is the fact that Bitcoin acts as a monetary system which is free to operate without the influence and control of the traditional financial system. Although he believes that the Covid-19 situation is a bit different, he qualifies it as a worldwide situation affecting all levels of business and humanity. This explains the initial freefall in the stock market, where Bitcoin appeared to be mirroring the same price patterns on wall street.
Bitcoin isn’t yet a perfect monetary system by any means. Would a typical retail investor in Bitcoin really want to “hodl” while the world is turned upside down? Most people were caught off guard by how fast this virus has progressed since March.
He goes on to explain that long-term investors in gold and Bitcoin likely feel there is long-term value in Bitcoin once the pandemic passes. That is also reflected in the current Bitcoin rally. Stimulus money to keep people housed and fed during a crisis situation is compassionate and the correct measure taken by the government. However from a purely economic standpoint, Vogel notes that stimulus money has to come from somewhere, and coupling that with a recession environment could lead to a difficult inflation scenario. This is generally the viewpoint of Bitcoin bulls at the moment.
Bitcoin Can Help You Take Control
Vogel concludes by noting that in the short term at least, whether the price of Bitcoin follows markets like gold (safe havens) or follows the stock market, nothing is certain in terms of how Covid-19 will play out, although at this time it seems like the economic after effects may linger long after the pandemic passes.
“If having full control over funds is important, then Bitcoin is your solution.”
Iyke Aru is a seasoned author and educator in the blockchain and cryptocurrency industry. He has been in the business of crypto content writing for many years with thousands of his articles across several platforms on the internet. Iyke is based in Nigeria where he stands out as one of the most informed and credible figures in the cryptocurrency industry. Outside blockchain and crypto, you will most likely catch Iyke playing or discussing football with friends and family.