Despite the recent BTC dump that saw its prices fall below $8k, many crypto experts still see Bitcoin as a safe haven. The global financial situation is horrible and only expected to continue deteriorating. Central banks around the world have started injecting money back into their economies, even if the GDP figures continue to fall, and the interest rates begin to take a downward trajectory. Considering all this, it begs the question, is crypto, and in particular Bitcoin (BTC), a safe haven in the face of financial turmoil?
Second Round of the Global Economic Mess
Each passing day spells more gloom for global economies. As we speak, the United States national debt currently stands at $23 trillion. In spite of the debt having hit never-before-seen levels, the central bank has continued to print new notes as well as purchase new properties all in the name of a quantifiable expedition.
As this happens, the FED has started lending cash to financial institutions to assist them to offset their short-term money obligations. The fact is that many of these banks have already run through their cash reserves. Many economic experts predict that these “repo funds” will continue in the coming days, and this may lead to a further decline in the interest rates.
Cameron Winklevoss, a Bitcoin Bull has provided a number of reasons why it will be important to search for a safe haven. According to him:
“There are currently $17 trillion dollars being held in the form of negative interest bonds. Regardless of how you look at the situation, consumers have 17 trillion reasons to start looking into ways they can use to own crypto assets, and in particular Bitcoin.”
BTC Will Provide a Safe Haven
During difficult times, it becomes hard for the populace to rely on their central governments, and more so on traditional financial institutions. The reality is that fiat currencies tend to be very fragile, as some nations in South America have come to learn in the past year.
While Bitcoin has only been around for one year, this asset was developed for this particular purpose. Global recessions have always proven to be cyclical in nature and, as things stand, the world is due to experience one soon.
It has been ten years since the last recession, and it appears as though the lessons from the last recession were not heeded.
Featured image: phys.org