How Bitcoin Can Easily Become a Globally Accepted Currency if a Real Global Recession Occurs
Apart from Venezuela experiencing more than one million percent inflation, the biggest economic news just might be the ongoing trade war between the U.S. and China. Ever since Donald Trump assumed office in 2017, both nations have been in a continued trade tussle without any of them backing down.
At the moment, Trump has decided to increase tariffs on imported Chinese goods from 10% – adding another 15% – to 25%. China is displeased with this and has also threatened to impose their own fees on imported U.S. goods, starting from the first of June. This trade war could be catastrophic not only to the economies of both countries but the entire global financial market. As said by Chetan Ahya, the Chief Economist at Morgan Stanley, this could easily be the beginning of a worldwide economic recession.
However, as undesirable as a global recession is, it could have positive implications on the application of Bitcoin. The decentralized cryptocurrency is global and out of control by any of the governments and this means that while fiat currencies are failing or at least feeling some impact of economic wars or global recession, Bitcoin and other cryptocurrencies would not. Bitcoin could eventually become globally accepted.
Fiat Currencies Could Fall
Already, it is assumed that the issues both economic giants have are already forcing local Chinese investors to move away from their dependence on the Chinese Yuan (CNY) and pursue something a lot less prone to government sanctions. This, according to some, is one of the reasons for Bitcoin’s recent surge.
The dollar, on the other hand, is probably the most powerful currency in the world. The U.S. Dollar isn’t only very prevailing within the United States but also has a lot of the world’s financial markets directly tied to it. This strength and reach that the dollar currently enjoys also conversely make it's somewhat vulnerable to changes in these markets. No change has been strong enough to upset the power of the dollar yet, but if the current economic war continues to degenerate, then the dollar would definitely take a hit. This would easily give
Bitcoin the opportunity to become more widespread and go global.
Benefits of the Bitcoin Solution
Bitcoin might not always be the most preferred currency to many financial experts in their different markets and for many different reasons. However, when you consider its usage in the midst of political unrest or economic uncertainty, there is no better option and no fiat is as immune.
If the trade war worsens, both countries’ currencies could lose some percentage of their value faster than they both expect. Since Bitcoin cannot exactly be affected by the tussle then it’s only natural that it becomes the ultimate solution to problems faced by investors and even firms that operate in both countries. This solution would see people seriously accumulating the currency and when use and application increases, the currency itself would soar.
Very recently, Brad Sherman, a U.S. Congressman, called for support for the ban of Bitcoin and all other cryptocurrencies. According to him, the use of crypto undermines the power of the U.S and also directly affects the strength of the dollar. However, if the dollar loses power in a recession, calls like this wouldn’t mean a thing.