In the wake of the coronavirus pandemic, Bitcoin again proved its dominance over traditional financial markets as the US hit a record low gross domestic product (GDP) drop. As reported, the plunge accounts for a staggering 32.9% Furthermore, it has been revealed that the national unemployment rate hiked to 1.4 million.
However, while the things took a sharp turn for the US government, the Bitcoin (BTC) market thrives. Within the same period, the cryptocurrency’s market capitalization had been doubled. Ethereum (ETH), even achieved more significant growth.
As relayed by the country’s Department of Commerce, a drastic plunge had been witnessed in 1921, when GDP dropped by 28%.
With over a million unemployment claims that were filed this year, the total number of unemployment claims climbed to 54 million. However, they made a side note that not everything on the record is active and that only 17 million individuals, or around 10% of the country’s workforce, are currently seeking employment.
Messari, a research firm dedicated to cryptocurrencies, reported that the crypto industry witnessed an incredible surge within the first half of this year, particularly in the second quarter. Notably, Bitcoin’s valuation surged from $118 billion to $204 billion.
Ethereum, on the other hand, now boasts a market cap of $36.4 billion, coming from $14.8 billion. Messari also emphasized that the aggregate market capitalization of cryptocurrencies has soared from $178 billion to $323 billion.
The US’ Panicked Response
Dan Morehead, the CEO of Pantera Capital, made a shocking announcement to its investors. In a letter sent out on July 29, the company revealed that the US government had printed a staggering amount of US dollars as a response to the current economic turmoil. He stressed that the money printed in June was more than what was released in the first two centuries of the country’s founding. Morehead further added that the government’s budget deficit as of last month, which is $864 billion, was significantly bigger than the total accumulated debt between 1776 and 1979.
Inflation notably pushes people to lose trust in paper money and seek safer and more valuable alternatives such as Bitcoin. As emphasized by Morehead, Bitcoin holders have nothing to worry about inflation and hyperinflation.
With such schemes from the US government, Morehead is optimistic that the crypto market will continue its upward momentum for the rest of this year.