As the global economic engine continues to reel from the effects of the slowdown induced by the novel coronavirus, it’s still not clear how much devastation the pandemic has actually caused. For example, due to the restrictions imposed by governments all over the world such as border lockdowns, trade limitations and import/export reductions, economic movement has almost ceased, causing many businesses, both large and small, to either face up to the losses or shut down completely.
Furthermore, traditional financial offerings such as stocks, bonds and equities have also been on the receiving end of a beating since mid-February, with many well-respected economists warning that the global economy is once again heading in the direction of a major recession — the effects of which will most likely be more profound than any of the other slowdowns witnessed in the past.
To put things into perspective, the FTSE 100, Dow Jones Industrial Average and Nikkei 225 have all witnessed value drops of unprecedented proportions over the past four months. In fact, the Dow and the FTSE saw their biggest quarterly falls in more than three decades during the start of the year.
As a result of these developments, central banks all over the world have proceeded to slash interest rates to help boost consumer confidence, primarily by making borrowing easier. However, with a second coronavirus wave expected to sweep the planet by the end of the year, fears of further increased volatility still loom large on the horizon.
Bitcoin’s ongoing stability is redefining market perception
Despite the disorder that seems to have engulfed the global financial sector, it’s worth pointing out that since May, Bitcoin’s (BTC) value has not strayed beyond the $9,000–$10,000 range, barring a few short-lived exceptions.
As a result of this newfound, albeit possibly temporary, stability, a lot of casual investors have started to give more credence to the notion that Bitcoin may finally be morphing into the stable asset class that many had initially envisioned it to be.
Furthermore, this theory has gained even more ground since March’s “Black Thursday” crash that saw Bitcoin and gold — another well-regarded traditional store of value — exhibiting a stronger correlation following the event. Providing his insights on the matter to Cointelegraph, Jeffery Liu Xun, CEO of XanPool — a peer-to-peer fiat gateway — stated:
“No one will dispute the strengthening of Bitcoin’s perception among the traditional finance class. This is in part due to Bitcoin’s continuous market performance and resilience, but also largely due to traditional hedge fund managers like Paul Jones openly promoting Bitcoin, positioning Bitcoin as a hedge against the inflationary global financial policy.”
Additionally, according to crypto data analytics firm Coin Metrics, the above-mentioned correlation has never been observed historically and seems to suggest that more people are beginning to view Bitcoin…