Bitcoin is, according to some, facing its first big test: whether it can function as a store of value during a further downturn in the market.
By that measure, the cryptocurrency failed spectacularly. The price of bitcoin collapsed in the face of the chaos induced by the coronavirus, losing about half of its value, while traditional markets recorded historic declines.
But that's not all or nothing for bitcoin. Its success is not judged by its price, but by its digital scarcity in a time of passing money, quantitative easing (QE) and record low interest rates
Earlier this week, the Fed cut interest rates to almost zero and fired a $ 1 trillion stimulus in an attempt to protect the world's largest economy from coronavirus-induced shutdown.
This followed similar interest rate cuts around the world, as governments and central banks struggled to reassure markets. The rushed action largely failed, with Dow suffering its worst day since the collapse of the Black Monday market in 1987 and its third worst day of all time.
On Tuesday, U.S. Treasury Secretary Steven Mnuchin said he was ready to write checks to millions of Americans to try to offset the economic burden of the pandemic - an unconventional economic stimulus measure that was recently popularized by some economists. from the left, like universal basic income (UBI), but it was once known as “helicopter money”: newly printed money that seems to fall from the sky in the public pockets (a concept that some crypto investors will be familiar with).
"We are thinking of sending checks to Americans immediately," said Mnuchin, speaking at a press conference at the White House. "Americans need money now, and the president wants to receive money now - and I mean it now in the next two weeks."
Elsewhere, Spain is apparently weighing stimuli similar to the “helicopter” style - something that can wreak havoc in the economically united eurozone. Many traditional economists don't like “helicopter money”. They say that it is more difficult to remove it from the system and that it can cause long-term inflation.
The world's central banks are being forced to consider extreme options due to the lingering effects of the 2008 global financial crisis, with many of their less radical political tools still in place. "The US is about to become addicted to this helicopter money very fast," said bitcoin proponent and co-founder of the Morgan Creek Digital fund, Anthony Pompliano, via Twitter.
Meanwhile, some market watchers are concerned that widespread sales, combined with helicopter cash offers, may cause excess cash. "At the moment, what we are seeing in the market is an unprecedented change in money," said Mati Greenspan, founder of the financial consulting firm Quantum Economics. “Everyone is liquidating everything they can. After the dust settles, and we start to see the end of the crisis, people will have no reserves of value. ”
The Fed's most recent offer to the market was a special fund to keep credit flowing through the U.S. economy during the fear of the coronavirus, and it has satiated investors a little. Dow, S&P 500 and Nasdaq were up about 5% at the close of the market on Tuesday. Bitcoin has become more or less indifferent to the news and has been weak since taking a big step down last weekend - stopping at around $ 5,000 per bitcoin. "Bitcoin was created for these events," said Keld van Schreven, co-founder and managing director of blockchain investment firm KR1. “Bitcoin, ether and other crypto networks don't need ransom or QE. They only need a handful of servers to execute, verify and complete transactions. Bitcoin, ether and other cryptocurrencies have eliminated the weakest link (us). It just makes them stronger. ”
Whatever the price of bitcoin, it cannot be artificially driven by central banks or governments - it will be supported only by increased demand. Most bitcoin cannot be printed or pasted from a clipboard. Bitcoin is, regardless of its extreme price volatility, consistency in inconsistent times.
https://forbes.com.br/negocios/2020/03/embora-nao-pareca-a-hora-do-bitcoin-e-agora/amp/