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PrimeXBT Analysis: How The Economic Crisis Has Made Bitcoin An Essential Asset

Press Release

Bitcoin has only been around for just over a decade. The first-of-its-kind asset has since grown over 100,000,000% from being virtually worthless, to now amid an economic crisis unlike the world has ever seen before, becoming an absolutely essential asset for investors and perhaps soon, everyday life.

PrimeXBT’s team of analysts has compiled data that demonstrates exactly how and why Bitcoin is becoming an essential asset in the new post-pandemic world.

Bitcoin Was Born During Recession, Designed to Change The World of Finance Forever

Bitcoin is unlike anything before it. Rather than asset shares based on company valuations or a commodity that’s price moves based on supply and demand, Bitcoin is a cryptocurrency underpinning a decentralized blockchain network.

The powerful and disruptive financial technology has the potential to change the world, and some of the most brilliant minds in the world – including Twitter CEO Jack Dorsey – believe it could eventually replace the dollar as the global reserve currency for the internet era.

Like the internet before it, the technology isn’t fully understood, and certainly not fully utilized. Billionaire venture capitalist behind many early dot com success stories, Marc Andreessen, claims Bitcoin is as transformational and transcendent of technology as the internet or PCs before it.

The new financial asset and budding technology born during the Great Recession has been touted as digital gold, a store of wealth, a transfer of value, a payment currency, a safe haven asset, a contactless payment option, and so much more. Bitcoin is all of those things, and that’s just scratching the surface as to why the cryptocurrency is becoming an essential asset. 

World Health Organization Cash Warning Causes Surge in Contactless Payments

At the start of 2020, a pandemic put the world in lockdown in an attempt to contain the outbreak and prevent widespread death and destruction. Retail stores were shut down, travel was restricted, and consumer spending shifted almost entirely online.

For those that did need to shop at places like grocery stores or where other basic necessities are sold, the World Health Organization urged the global community to lean heavily on contactless payment options, such as Venmo, Apple Pay, and even Bitcoin.

Using those payment methods, users can scan a QR code or, through NFC technology, make payments without the need to handle tainted cash. Bitcoin exists only on the blockchain through the internet. No physical form exists that could lead to exposure to disease, viruses, bacteria, or worse. In the post-pandemic world, this is extremely important.

Be Your Own Bank During Quarantine Conditions

The closure of businesses everywhere also led to a massive surge in digital payment methods due to more online spending. Both Mastercard and VISA reported extreme surges in digital transactions, especially in Latin America and other countries where fiat money remained king.

In these same regions, like El Salvador, Bitcoin is powering local economies that don’t have access to traditional banking infrastructure. By allowing users to be their own banks, BTC is distributed locally for residents of local villages to then exchange for groceries and other items. Without Bitcoin, many would be left without a way to pay for necessities in these countries with limited infrastructure and access to financial services.

Growth in volume at LocalBitcoins in Latin American regions also further depicts the importance of Bitcoin in areas where access to digital payments are less common, and cryptocurrency is proving to be more reliable and accessible.

Safe Haven Asset And Fastest Horse In the Face Against Inflation

In other nations, where money can be printed at a whim, such as the United States, the cryptocurrency is being looked toward by hedge fund managers as a hedge against hyperinflation as a result of recent monetary policy.

Efforts to stimulate the US and other global economies has led to an influx of dollars in the market. The flood of dollars lowers the asset’s actual value, increasing the costs of everything tied to it. Investors long bought gold for this very reason, but due to Bitcoin and the asset sharing many similarities, with the precious metal, it too is considered a potential hedge.

Paul Tudor Jones, famed hedge fund manager, claims that Bitcoin could be the fastest horse in the race against inflation, and compared the asset to gold in the 1970s. At that time, gold was trading at just $35 an ounce and was pegged to the dollar. Once the dollar-peg was removed, gold has since grown to over $1800 an ounce.

In another comparison between Bitcoin and gold, the last two years of price action has resulted in almost the same exact ROI in both assets. Bitcoin had a much more wild ride than gold did along the way, but they both arrived at the same destination. The cryptocurrency on pace with the primary safe haven asset, gold, speaks volumes for Bitcoin’s potential as a safe haven asset.

Replacing The Dollar As The Reserve Currency

And in the bleakest of scenarios, Bitcoin could eventually save the day. The dollar has long enjoyed global reserve currency status. But as a result of mismanaged monetary policy and the deadly blow of the pandemic, USD’s reign of supremacy may be coming to an abrupt end.

Global economists are expecting an over 35% drop in USD against other major currencies, including Bitcoin. The dollar is also facing stiff competition from the Chinese yuan. The emerging economy has been gaining on USD, and the release of the digital yuan could be the final nail in the coffin.

The world’s best hope is that Bitcoin unseats the dollar instead, becoming the first non-sovereign currency that takes its place. Every 100 years or so, the global reserve currency falls out of power, and so does the country it represents. If the US falls out of power and the dollar falls, Bitcoin could rise and fulfill the destiny many top tech minds see in its future.

Buy and Trade The Most Essential Financial Asset Ever With PrimeXBT

With Bitcoin becoming a safe haven, thriving as a contactless payment, and potentially becoming a global replacement for the dollar, getting into the crypto asset now is still very early.

And before adoption takes place, the cryptocurrency remains a speculative asset with enormous potential but also making it an ideal asset for traders. Speculative assets like Bitcoin, even despite slowly becoming an essential asset, is wildly volatile, often rising and falling 50% or more in a single month.

In this post-pandemic society, where cash is contagious, the economy is struggling, and the dollar is in danger, Bitcoin becomes more essential by the day. Those looking to invest in the asset and trade each wild price swing can do so with PrimeXBT, an award-winning Bitcoin margin trading platform offering CFDs on forex, stock indices, commodities, and cryptocurrencies like Bitcoin.

All accounts are denominated in BTC, so users can buy Bitcoin directly on the platform to top up their accounts and then trade Bitcoin-based contracts, taking long or short positions to profit from whichever direction the market turns. The platform features built-in charting software with technical analysis indicators, drawing tools, and much more. The customizable UI is ideal for new traders and experts alike.

Register for PrimeXBT today to take advantage of trading what is quickly becoming the most essential asset ever to exist.


Disclaimer - OBN is an informational website which aims to give the latest blockchain related news to the readers. Articles on OBN should not be considered as investment advice. Trading cryptocurrencies is a high-risk investment, every user is advised to consult an expert before making any decisions.