Considering the current scenario of the declining global economy and financial markets due to the crisis-induced by Coronavirus, economists have already warned about an awaiting economic recession. Daniel Jeffries, a futurist and author, shared his thoughts about the future of the Bitcoin after the end of COVID-19 pandemic with the Cointelegraph.
Daniel Jeffries has indicated toward two possible consequences of this global outbreak of Coronavirus. As we are aware of the trillion dollars damaged caused by this virus; however, the current uncertainty about its curb or development of effective treatment may result in a loss of another trillion dollars. It will have a negative impact on the crypto ecosystem, while the damage and ineffectiveness of the outdated system in tacking such an emergency will accelerate innovation and develop a complete alternate distribution system based on blockchain.
End of Decentralized Networks
In the first scenario, the massive financial damage caused by this virus will lead to a severe recession throughout the world. In order to support and re-build the economy, the central governments will opt for authoritarianism control and take strict measures on the personal finances of its citizens. While the value of fiat currency would be highly reduced, the cryptocurrency could be an alternate option. But, the government will crackdown on the centralized cryptocurrency exchanges that are majorly responsible for the liquidity of the entire cryptocurrency ecosystem, and it will prevent citizens to efficiently carry out transactions in cryptocurrencies. Daniel Jeffries concludes that in such a situation, the Bitcoin price will reduce to nothing, and probably the entire cryptocurrency market will collapse.
A New Era of Blockchain
Restoring the hope of bitcoin enthusiasts, the futurist and ardent supporter of Artificial Intelligence, Daniel Jefferies, shared another possible outcome of this global crisis.
The destruction caused by Coronavirus would force the scientific community to think beyond conventional ideas to tackle such crises effectively in the future. This will drive innovation and lead the crypto to evolve into a complete ecosystem. The current drawbacks would be fixed, and the blockchain will turn into a complete and robust alternate distribution system. In this case, the bitcoin will prosper and thrive along with its increased global adoption, he explained.
Is Bitcoin still a Safe Haven?
While the world financial market continues to bleed amidst the global slowdown of economic activities, broken supply chain, and uncertainties about the future, bitcoin price was also not untouched. Bitcoin price was reduced by more than 50%, along with a decline in stock markets. This has proved that bitcoin is not immune to global financial activity, and it also gets impacted by a crisis like a traditional financial market. Having said that, the bitcoin price was rebounded overnight up to 40% after hitting a record low, unlike stock markets that are still diving down after many critical measures taken by governments.
In a statement, CZ, the man behind the world’s biggest crypto exchange, Binance said that the bitcoin market is around 1/1000 of the financial market. The comparatively tiny market cap may get influenced by the activities in the equity markets. However, its value can not be reduced like fiat because of its limited quantity, and that can not be changed in any scenario. Therefore, Bitcoin is a relatively Safe Haven.