Bitcoin Continues to Increase in Popularity, and for Good Reasons


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Author: Jeffrey Taylor

The current coronavirus pandemic is revealing serious problems with existing financial systems. COVID-19 is also revealing the benefits of Bitcoin.

Although the many economies are slowly opening up, their stability remains unknown. There is little doubt that 2020 will long be remembered. Not only for the coronavirus and for the toll it took on humanity, but also as the year global financial markets suffered their worst day since Black Monday when the price of oil went negative for the first time in history.

Bitcoin Continues to Increase in Popularity

Bitcoin, however, continues to increase in popularity, not only in the West but also across the globe. Bitcoin has proven itself to be extraordinarily resilient to the current economic crisis. In 2020, Bitcoin has even overtaken gold as the best performing asset.

The pandemic has all but ground the world economy to a halt. The U.S. Federal Reserve, undoubtedly the words most powerful central bank, has had to print a seemingly unlimited supply of new money. The total damage caused by the pandemic has yet to be counted, but it is estimated to be at least $1 trillion, and the knock-on impact of rapidly growing unemployment.

Although the pandemic will eventually end, the crisis will not yet be over. What it will have shown, however, is there is a lot to learn about the traditional financial system. During 2020, Bitcoin will become a new economic class. It is time for people either to pay attention to it or to miss out.

Finance as We Know It Needs to Be Revamped

Two things of magnitude happened close to one another. The Fed announced there would be an infinite supply of money, and the value of oil began to decline. As these things were happening, the value of Bitcoin was growing.

People are beginning to see that as a society, we can no longer rely on traditional forms of finance. For many years, global debt has grown exponentially, and asset bubbles continued to get larger. One can conclude that society has learned very little from the 2008 financial crisis. The coronavirus pandemic may be the last straw, the icing on a crumbling cake that society today is built on.

However, it could be a different story with Bitcoin.

Bitcoin’s ability to ride the market upward is a sign of its resilience, as well as its role as a safe-haven. Bitcoin will emerge from this crisis even stronger, and for a very simple reason. Bitcoin is a reliable asset when compared to officially authorized “coin of the realm.” There is no longer a “finite” amount of U.S. dollars. However, there are 21 billion Bitcoin, and there will never be more.

With the Federal Reserve cutting U.S. interest rates to zero, it is evident to many that negative interest rates are on the horizon.

The world is heading in a dangerous direction, and the slowdown in the market has a long way to go yet. The global economy has not witnessed anything quite like the current crisis since WW2. There is bound to be more damage to the economy, as well as more casualties.

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Jeffrey Taylor is a retired mechanical engineer who has an interest in all things financial, including emerging markets and cryptocurrencies.