As recently said by businessman Cameron Winklevoss, one of the twins who owns Gemini exchange, the bitcoin will experience a historic turning-point after the coronavirus. This view, however, is not unique to the cryptocurrency entrepreneur. Other analysts also believe that the economic consequences of the pandemic will lead more people to look for the cryptocurrency as an instrument of protection and appreciation.
The belief is mainly rooted in the inflationary action of central banks to contain the crisis. The injection of trillion sums into economies should in the long run cause an unprecedented loss in the purchasing power of currencies. Including the U.S. dollar. This is also one of the aspects of Transfero’s investment thesis that cryptoassets will be the more highly valued currency in the next two years.
The situation in the oil market also contributes to this belief. Recently, the commodity was traded in negative values. This was a strong sign that the world economy will experience a deep depression and that central banks will inject even more money to contain the bloodletting. The bitcoin and the cryptoassets market as a whole remain unrelated to these movements.
Turning-point beyond bitcoin halving
Recently, the cryptocurrency went through the halving process, when the miners’reward was cut in half. The halving has shown a feature of cryptocurrencies that contrasts with the actions of central banks. While these institutions issue currency to contain the impacts of the coronavirus crisis, the bitcoin has limited emission controlled by its mathematics.
The way bitcoin is going through the coronavirus crisis also reinforces the arguments that the cryptocurrency is going through a turning-point. Although in the early days of the crisis, the cryptocurrency had suffered along with the entire market, the recovery was fast and its price took off from market movements – the cryptocurrency had also became more correlated with gold.