Worries about a global economic crisis are on the rise. As different economies exhibit a downward journey, traditional investors are cramming to save their assets. The flashing signs of a looming recession indicates that it could be the golden era for Bitcoin.
Globally, the majority of bonds are now trading with a negative interest. According to the industry’s leading analyst, it is one of the reasons why most investors are thinking of abandoning the traditional system. More and more market players are eyeing Bitcoin and its aggregated markets as one of their safe grounds during these ambiguous times.
Throughout this year, the tension and pressure brought by the ongoing trade war between the United States and China had significantly negatively impacted the equities market. The knock-on effects were made even worse by the UK’s decision to leave the European Union, or popularly coined as the Brexit.
While downwards pressure grips the global economy, Bitcoin carries on with its bullish attitude. In the first half of this year, the world’s leading cryptocurrency stunned the industry with its meteoric rise. From a historic lower of -$3,000, Bitcoin sprung to a $13,800 high. However, the incredible price rally seemed to fizzle in June. Until press time, Bitcoin seemed unable to deal with the massive pressure. This analysis is supported by the number of market investors that are turning bearish on the BTC market.
There had been numerous claims that traditional markets do not correlate with Bitcoin. However, crypto’s recent bearish momentum suggests otherwise. Investors have a good chance of testing whether Bitcoin can live up to the hype of being a digital haven as the United States’ economy is showing signs of declining.
According to Pomp, a crypto analyst, the last time the industry had witnessed “2 year / 10 year US bonds” was in 2007. Now, it is happening again, and the people could only hope that it’s not an indicator of a looming recession. However, many analysts think that it would probably happen.
Is Bitcoin the Beneficiary of a Widespread Economic Turbulence?
Although there is no guarantee that investors would hail Bitcoin the same way they do to gold, the experts believe that the current situation of bonds are enough to convince the investors to turn to a decentralized alternative such as Bitcoin.
Gabor Gurbacs, VanEck’s director and crypto strategist, tweeted that 27% of the bonds worldwide have a negative interest rate. This figure supports the notion that investors would probably invest in Bitcoin rather than wait for the global economy to bounce back, which at this point seems unlikely.
As Bitcoin’s price rally continues to unfold, investors will have enough time to consider whether BTC presents the best option to survive the impending global recession or not.