Cryptocurrency outlook optimistic due to coronavirus and politically powerless government

The global lockdown in response to the coronavirus outbreak has exposed fatal flaws in the monetary and financial system that has dominated the world since U.S. President Nixon abolished the gold standard in 1971.

Freeing the dollar from its bondage to gold essentially gave the central bank permission to print it as it pleased.

In the decades since, and especially since 2008, they have done just that.

Central banks that have influenced economic policy in the Western world

Central banks argue that without the intervention of near-zero interest rates and massive money supply, the global financial system would have collapsed in 2008.

They are also rarely bound by the opinions of elected officials.

Because of this thinking, central bankers are free to pursue almost any policy they believe is appropriate. The same was true during the 2008 financial crisis.

However, this oversupply of currency caused enormous damage. There was unprecedented asset price inflation and social inequality soared.

People who are wealthy enough to own assets have seen their net worth explode since 2008. On the other hand, people who barely survive on one salary had no choice but to watch the real value of their income plummet compared to before.

We hate to say it, but this trend will continue no matter who the final winner of the US presidential election is.

A clogged and dysfunctional government is virtually guaranteed to force central banks to step in once again to fill the void. This is the reality we face.

Permanent asset price inflation is an inevitable consequence of current monetary policy, and central banks will continue to maintain their dominance through a system that creates excessive debt.

As this problem continues to drag on, investor demand for safe assets such as Bitcoin and gold is bound to increase in the coming months.

Why Bitcoin is Better than Gold

In the case of gold, a rise in price immediately leads to an expansion in supply. For example, high gold prices mean that lower grade ores that were previously uneconomical to mine will be mined. And the resulting increase in supply naturally affects the rising gold price.

But Bitcoin doesn’t work that way. There is a supply limit set on the blockchain. Only 21 million BTC can be supplied regardless of price or market conditions.

What happens if investment demand surges but supply remains fixed? Prices skyrocket. This is the most basic aspect of the economy.

This also explains why the cryptocurrency market is capable of an exponential rise in a parabolic shape. However, the situation will continue with repeated declines and rebounds, breaking all-time highs.

Above all, whenever a cryptocurrency bubble bursts, its actual value does not return to its previous level. The reason is that each time a bubble continues, new people flow into the cryptocurrency market, and many of them never leave the market.

The cryptocurrency industry grows by attracting people during bull markets and consolidating and expanding infrastructure during bear markets.

Of course, as more people try to take advantage of the market sentiment, it sets the stage for a parabolic surge.

As long as global central banks stick to their current policies, this movement will continue.

Because of this, we think it’s best to invest some of your savings in Bitcoin and Weiss Ratings’ top-rated stocks.