Cryptocurrency As An Investment Option In A Crumbling Global Economy
- The trade war between China and the U.S has forced investors to look for alternative stores of value
- While gold has been the preferred store, times have changed and investors prefer stores of value that are easily movable around the world
- This has brought their attention to cryptocurrency and many have invested in them which is why they are doing so well
Recently, there has been panic as to where the world’s economy is going from here. Economists have already projected another financial crisis after the 2008 financial crisis. As a result, major stores of value such as gold are gaining attention as uncertainty looms about the future of the U.S Dollar and other globally recognized currencies.
Banks and major financial institutions are already taking steps to avert the impact of this coming crisis by encouraging customers to take loans. Financial institutions in the U.S and Australia and several major economies are already cutting interest rates on loans in order to encourage borrowing. In fact, some banks are already offering negative interest rates.
All these are steps to ensure that the impending financial crisis does not hit the financial institutions hard enough to cause a destabilization. In the midst of the panic, cryptocurrencies have benefited immensely. While analysts predicted a surged for digital currencies like Bitcoin (BTC) in 2018, they did not expect the surge would come so soon. The recent surge has been mainly due to the trade war between China and the United States.
Investors have been forced to move their wealth into something that will not be affected by the trade war and Bitcoin and other cryptocurrencies have become the options. While gold has been the major store of value for investors, it is not easily moved around and investors want their funds easily movable in other to avoid the hectic scrutiny on international borders and those imposed by governments.
So far, money has been flowing into Bitcoin from China, causing the Chinese Yuan to crash. The same fate may be awaiting the U.S Dollar already, and so cryptocurrencies have become a kind of safe haven for investors as they are not correlated with the crashing stock market. In fact, it has been shown that cryptocurrencies do better when stocks are down, which explains why the cryptocurrency market has done so well in 2019.
As the trade war continues, it is expected that more money will pump into the cryptocurrency market thus pushing the prices of digital assets up. Investors will therefore be making a wise decision by moving wealth to this option before it is too late.