With uncertain times ahead in the stock markets and world economy, most people are wondering where Bitcoin and blockchain tech fits into this up and coming economic crash. There is a high probability that quite a few banks will collapse over the next couple years, but will this spark mass adoption for cryptos?
One thing is for certain, and that is BTC will not go bankrupt. This is because no one owns Bitcoin and it is not controlled by one central authority. On the other hand, banks will fail because their business model is not based on simple monetary transactions. Needless to say, there is much more to banks and how they do business.
One reason people may start to look over towards cryptocurrency investments is because the entire banking model is now at risk. Businesses cannot pay back their loans which has a two-fold negative affect on the bank. For one, the bank will no longer earn interest on loans given to failed businesses.
Those high yield pensions and savings accounts that are leveraged against the stock market are losing money. This means the accounts will start to report negative figures, and as a result everyone involved starts to pull their money out causing further downfalls on the stock markets.
It is not the first time we have seen this happen in the stock markets – rewind to 2008, and further back to when the dot com crash struck. With unreliable stock markets, cryptocurrencies historically tend to benefit. Traders, risk takers, and even those looking for somewhere to put their surplus cash where there is a chance of high yields begin to look at the highly volatile cryptocurrency marketplace. If this is you, then a great place to start is by looking for some free bitcoin to go with your investment.
Although most banks will be bailed out by their respective governments, confidence in the banking system is set to be at an all-time low. cryptocurrencies can offer them a safer way to store their pensions, life savings, and even use crypto loan services where interest rates will remain more consistent. This is still a risk though so why would people invest in this way?
One of the reasons that cryptocurrencies could be a safe long-term investment is because those bank bailouts will cost governments like the UK, EU, and USA money they really do not have. They will create bonds that will likely never be paid back and print cash en masse. The more cash printed, the less valuable the currency will become. Now almost every country affected by the coronavirus will have to do the same so currency values are not expected to fluctuate too much.
On the other hand, cryptos like BTC will reach a certain point which is 21 million. Once Bitcoin hits this number, scarcity and demand should see the crypto increase in value. While fiat currencies should decrease in value as banks create more bonds, print more cash, and increase national debt. To get you Bitcoin experience underway check out how you can earn free bitcoin here.