The Future of Bitcoin and Crypto after Covid-19

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The coronavirus is a hugely destabilizing global event for everyone and everything, especially when it comes to the economy. Over a third of the world’s population is suddenly in lockdown and economies across the world are threatening to grind to a halt. Everywhere, financial theorists are doing the equivalent of apocalypse prepping by making drastic predictions of how (and if) global economies will survive the oncoming recession.

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4 Predictions Of How Cryptocurrencies Will Survive Coronavirus

The worst of the bunch are crypto theorists. I mean this in the nicest way possible, but crypto writers are much like the digital currencies they hold so dear: easily excitable and prone to violent fluctuation. As a result, blogs are being flooded with theories on how the coronavirus will affect the value and lifespan of cryptocurrencies.

 Drastic Predictions

The uncertainty brought forth by the coronavirus is giving rise to a fair few extreme predictions about what the world is going to look like on the other side. Amongst these are DC Forecasts’ “specifically dark scenario” in which a severe global recession pushes otherwise democratic governments to authoritarianism, curbing financial freedoms and strictly controlling their citizens.

In this scenario cryptos do not fare well, being centralized and agovernmental exchange currencies. In this apocalyptic scenario, any operation of cryptocurrencies could be seen as an attempt to circumvent strict governmental restrictions on the economy. Cryptocurrencies are still relatively new phenomenon, they could easily become a financial blip.

This seems an exceedingly unlikely scenario, considering the level of infrastructure necessary to achieve this global shift towards authoritarianism. That’s not to say there is no truth to the argument that, as Edward Snowden puts it, governments are using the coronavirus to build “the architecture of oppression”, or the push for a cashless society, and we should be paying close attention to the measures politicians are taking and their potential long term impact. But, it seems like the far less risky method is to strike a balance between saving lives and protecting the economy, not force us in one way or another.

 Optimistic Predictions

In fairness to DC Forecasts, their second possible scenario is far more optimistic for the outlook of cryptos. They see the potential for the pandemic to act as a catalyst for innovation, a sort of trial by fire to see if fledgling currencies can adapt to the oncoming economic recession and the policies that follow it.

The key, in the mind of their single-named source Jeffries, is to think of the applications of distributed ledger technology “besides just money”. Thinking on a “macro scale” in terms of value for both consumers and buyers. Jeffries does not offer up any specifics, but I can see there’s certainly a case to be made for blockchain technologies to help with healthcare data management at a time where international cooperation on healthcare is paramount.

 Bitcoin Immunity

One of the optimistic predictions deserves to be analyzed in isolation: the idea that Bitcoin (or cryptos in general) is “immune” to the virus. Of course, the use of the term immune here is metaphorical, arguing that, by their digital, decentralized nature, cryptocurrencies are not vulnerable to economic fluctuation in the same way traditional currencies are.

The crux of this immunity argument is that, while the world progresses deeper into lockdown, cryptos are already set up for a quarantine environment. They exist solely online, so are not affected by highstreet closures like other banks, and were built with international remote transactions in mind. Proponents of the argument also point to the surge in fintech app use to say that fintech is one of the industries actually benefitting from the pandemic.

Critics of this argument point to the fact that last month Bitcoin saw a 44% crash and the world’s top 10 cryptos saw an average drop of 30%, in line with the other markets. Indeed, considering that Bitcoin and other cryptos are famous for being unstable, it’s surprising anyone thought they might be immune to the one thing that has successfully crippled all industries around the world (with the possible exception of toilet paper manufacturers).

 Cryptos Still Have Potential

It appears that cryptos are no more immune to financial pressure than any other asset, but it appears neither are they at an increased risk. In fact, their versatility and innovation is the one thing they have going for them. Traditional currencies are tied to decades if not centuries of policy baggage, making them simultaneously less flexible for the individual user and easier to manipulate by major financial institutions. Cryptos were born from a revolutionary spirit that sought to dismantle these systems, or at least circumvent them, giving authority back to the currency users.

What better time to revitalize this revolutionary spirit than a global pandemic that is turning society, politics and the economy on its head? Perhaps venture capitalist Tim Draper’s suggestion that millennials should invest in cryptos will be welcomed by a generation that has seen not one, but two cataclysmic global recessions in their young lifetimes. If the traditional banking system is “the Oldsmobile”, in Draper’s words, the pandemic might just be the car crash that inspires you to buy a shiny new convertible.

 Conclusion: Take Your Time

The proliferation of opinions out there on how cryptos will survive the coronavirus is proving one point of sage wisdom: don’t panic. You may be inclined to make drastic decisions based on drastically pessimistic or optimistic decisions, but doing so is just setting you up for mistakes. We’re all going through this uncertain time together, be secure in the knowledge that no one has all the answers right now.

From looking at the gamut of predictions being made right now, most signs point to cryptos surviving the virus, though stability is in question. That means, for anyone currently holding cryptos, keep a cool head and see how the markets move, but make decisions based on logic, not emotion.

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About Author

Laura Bundy

Laura B. Bundy is a marketing professional and business-consultant at Luckyassignments.com. She has been involved in many projects investigating the use cases for cryptos for small and medium-sized businesses. She enjoys writing, traveling and helping clients to grow their businesses.

Disclaimer: All content found on 7bitcoins.com is only for informational purposes and should not be considered as financial advice. Do your own research before making any investment. Use information at your own risk.

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