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Bitcoin Holds Steady as a Store of Value as COVID-19 Wrecks Global Economic Havoc




Since the COVID-19 pandemic started to ravage the world, many sectors of the world have been put to rout. For some industries, such as the global financial industry and the food industry, it has been challenging to bounce back after suffering a massive hit from the pandemic.

There has been a decreasing trust in the traditional finance sector worldwide; the COVID-19 pandemic has only revealed the inadequacies in the inability of the financial industry to handle real-life financial setbacks adequately.

On the flip side, there's been a tendency towards using digital currencies, with a whopping 72% surge in the use of Fintech apps across Europe. In these hard times, Bitcoin has proven to be a store of value that people can rely on for their financial security.

Moreover, in the last three years, Bitcoin has gained more trust than even the traditional financial systems across the world. A Bitcoin survey led by The Tokenist showed the rate of adoption of the cryptocurrency has increased by 29% since 2017.

 

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How the COVID-19 Pandemic Is Crippling the Global Economy

The coronavirus pandemic has affected the world economy. Booming economies worldwide are recording their lowest GDPs, and developing countries are going into severe recession periods. Here are some of the ways the COVID-19 pandemic has contributed to this massive economic downturn all over the world.

1. Unexpected Disease Outbreak: The first challenge that the major players in the financial industry experienced is an unexpected hit from the COVID-19 pandemic. If they had foreseen such a disease, more preparations would have been made to reduce the impact on the global economy and the financial sector.

2. Diverted Funds: Most of the funds that would have been channeled into other industries to keep a nation's economy booming have been redirected to take care of the health of COVID-19 patients and also care for individuals with little or no means of livelihood.

3. Debts: To assist people who lost their jobs and other means of earning due to the pandemic, many governments have had to pump large sums of money into the economy, with America already spending trillions of dollars. This can be a source of enormous debts for countries with a lower budget.

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Bitcoin VS Bonds, Stocks, Gold and Real Estate

For a long time, real estate, government bonds, stocks, and gold have been the most reliable store of value and financial security. However, the story has been different recently, and people are becoming more confident about Bitcoin as a store of value.

According to a recent report, Tim Draper, a significant financial player and investor, said that Bitcoin is a secure financial system for millennials' future. He also added that he is diverting most of his financial assets to digital assets.

New.Bitcoin.com published a report that surveyed 5,421 people in 24 countries, which showed that more people would preferably opt for Bitcoin when asked to choose between the cryptocurrency and the equivalent of another store of value.

Gold seems to be a reliable store of value. However, it is always affected by negative occurrences in the world. For example, it is challenging to transport gold because of restricted inter-state and international travels.

Bitcoin is unaffected and has maintained a steady value, with little fluctuation in price despite the consistently poor performance of most of the other stores of value. Perhaps the most significant features that make it more reliable these times are decentralization, ease of transfer, and transparency.


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