HomeBitcoin NewsThe Coronavirus Has Really Pushed Bitcoin Forward

The Coronavirus Has Really Pushed Bitcoin Forward


Related stories

El Salvador Pushing to Institute Banks Geared Toward Bitcoin Investors

El Salvadoran president Nayib Bukele is advancing a proposal...

Bitcoin and Altcoins Drop Massively in Value Despite Upward Expectations

Despite news this week of inflation rates lower than...

Whales Snag $1.38 Billion Worth of BTC In One Day

June 11 saw Bitcoin Whales purchase over $1.30 billion...

How strange is it that the coronavirus has led to the suffering of banks but the overall establishment of bitcoin as a potentially mainstream asset? According to most analysts, the situation is not strange at all.

Bitcoin Is Now More Mainstream Than Ever

Bitcoin was largely speculative prior to the spread of the coronavirus pandemic. People saw it as something that could be invested in and something that could get them a lot of money if they played their cards right, but that’s about it. Nobody really saw the asset as a “safe haven” or “digital gold” as it’s been touted all these years, but the spread of the virus has changed all that.

Now, people legitimately see bitcoin as something that can hedge one’s wealth against inflation and other economic problems. They see it as an asset that can keep them safe and ensure their financial strength during times of strife. DBS chief economist Taimur Baig commented in a recent interview:

Pre-pandemic demand was largely speculative. People saw bitcoin had a spectacular run and wanted to be part of that game, so what’s wrong with putting in one percent of assets under management [into bitcoin]? But I think post-pandemic is beyond speculative. It’s more about, ‘This thing has fixed circulation. It will not be debased.’ People are worried about dollar outflow and wondering if they should hold crypto in addition to gold as a safe-haven currency… There is no point of no return for public and private digital currencies. Both remain brave new frontiers with new use cases, technological developments and challenges appearing regularly.

This year has marked several institutional players getting involved in crypto. Grayscale has mentioned that its second quarter bitcoin investments topped one billion dollars, while MicroStrategy has already purchased more than $400 million in bitcoin to add to its growing wealth pool as a means of staying safe and remaining in operation while the virus is in play.

Why Banks Have Fallen Behind

In the meantime, stocks have struggled throughout the year, experiencing moderate jumps and falls since March, and fiat currencies like the US dollar have been subjected to inflation. Russ Mould – investment director at brokerage AJ bell – explained:

Low base rates drag down the interest rates that banks can charge on loans and quantitative easing is designed to flatting out borrowing costs too, with the results that credit spreads – the premium in interest rate that a company has to pay relative to a government – are also relatively low. Central bank policies may be, unwittingly, doing more harm than good when it comes to the major lenders… Only US banking stocks have shown any real signs of life in the past few years, but the pandemic, a recession and reversal of Fed policy from tightening to easing (and running policy loose until at least 2023) has taken care of that in 2020.

Nick Marinoff
Nick Marinoffhttps://www.livebitcoinnews.com/
Nick Marinoff is currently a lead news writer and editor for Money & Tech, a San Francisco-based broadcasting station that reports on all things digital currency-related. He has also written for a number of other online and print publications including Black Impact Magazine, EKT Interactive, Seal Beach USA and Benzinga.com, to name a few. He has recently published his first e-book "Take a 'Loan' Off Your Shoulders: 14 Simple Tricks for Graduating Debt Free" now available on Amazon. He is excited about the potential digital currency offers, particularly its ability to finance unbanked populations and bring nations together financially.


- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories