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Report: Bitcoin Gains as Governments Fight Off COVID-19-Induced Recessions

For the better part of three months now, countries have dealt with the coronavirus pandemic. While lockdown orders and travel restrictions have all but forced economic activities to stop, several governments have had to resort to drastic measures to prevent sliding into recessions. 

In the United Kingdom and the United States alone, both governments have provided trillions in financial stimuli to small businesses and companies to help them weather the storm. Other countries have continued to manipulate the natural economic order of things, and as a new report shows, Bitcoin could benefit from this. 

Increased Money Printing Will Only Push Bitcoin Higher

The report in question was compiled by Delphi Digital, a cryptocurrency research firm. It mainly looks at just about everything – ranging from Bitcoin’s on-chain data to the global macroeconomic climate. Thus, it takes the current state of the traditional financial and crypto spaces and attempts to build a view of the latter’s possible future.

As Delphi explains, the global economy is truly in a precarious position right now. As it confirms, the amount of financial relief that governments have implemented in the past few weeks should amount to $10 trillion. 

However, while governments continue to toy with the possibility of ballooned inflation levels, Bitcoin will continue to grow naturally – with demand and supply influences supporting its price. Delphi predicts that this trend will continue to benefit Bitcoin, as the asset will remain stable as opposed to traditional fiat. The firm also pointed to the successful Bitcoin halving, which occurred earlier this week, as another catalyst for a price surge.

However, the firm also explained that the anticipated surge could take some time to materialize. The firm pointed out that historically, most of Bitcoin’s major price rallies had come at times when major central bank assets started to see decelerating growth.

Bitcoin Off to the Races

The research pointed out that Bitcoin is already doing much better in developing economies. For instance, the top digital asset has gained 44 percent against the Russian ruble. The country, as well as several other oil-dependent nations, has taken an economic dip as a result of the glut in oil prices that, ironically, it helped to create.

Bitcoin is also up 74 percent against the Brazilian real and 52 percent against the Mexican peso. Both Latin countries have dealt with crippling debt and inflation for years, so it’s not much of a surprise.  

“We expect the demand for non-sovereign ‘safe haven’ assets to rise considerably as the risk of broad-based currency debasement increases,” Delphi reported, adding that assets like gold should also see substantial gains soon.

Bitcoin’s performance amid the coronavirus has been commendable. While the top cryptocurrency dipped with traditional stocks in the middle of March, it rallied after a fortnight and has now pushed to even more highs. The successful halving has also had some effect on Bitcoin’s price, as it broke the $9,000 threshold earlier today. The next challenge for it will be to hold a stable price peg over the elusive $10,000 mark. 

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      Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.