Worries about the spread of the coronavirus continue to hammer global equities, with the Dow Jones Industrial Average dropping 2,997 points, or 12.9% on Monday, and the S&P 500 Index plummeting 12%. As the US stock market wallows in freefall, Bitcoin (BTC) is showing signs of relative stability after it crashed on Thursday, remaining steady around the $5,000 level, at time of writing.
In an episode of The Crypto Lark, YouTuber Lark Davis and his guest, crypto evangelist and Nugget’s News founder Alex Saunders, identify how the pandemic-induced economic meltdown is defining Bitcoin as a distinctly different asset compared to traditional equities.
In the midst of the mayhem, Saunders says the king cryptocurrency can emerge as a better alternative to the world’s financial systems.
“Last week we had a bit of a rally when stocks went down. Today stocks have had a really bad day and Bitcoin is sort of holding up…
Hopefully, if Bitcoin could detach from that, make itself known as this separate system, and in this world, where we’re now going to be printing trillions of dollars in every currency and negative rates, that is just that environment where Bitcoin is going to – I just can’t see how you can’t be bullish medium-to-longer term.”
Adds Davis,
“Bitcoin’s one of the freest markets in the world when you think about it because there’s not actually anyone who can step in and save the crypto market.
If it’s going to go to zero, that’s what the market decides, not that it’s going to go to zero, but there’s no Federal Reserve to step in and say, ‘Let’s shore up the Bitcoin markets.’ Doesn’t work like that. It’s this free market deciding the value of these assets.”
As critics highlight how central bankers are intervening in the financial markets to thwart another economic crisis, the banking system prepares for more quantitative easing, slashed interest rates, negative interest rates, buybacks and other manipulations, stimulus packages and monetary policies.
While investors and users feel the impact of recent events and macro economic factors on Bitcoin’s price, its fundamentals powering a peer-to-peer network remain beyond the pale of traditional monetary policies that are designed to patch holes and rescue a broken system.
Adds Saunders,
“I think Bitcoin certainly has its manipulators in terms of the whales that push it around and leverage trading, but in terms of who’s going to save the market – the Federal Reserve ain’t coming to save Bitcoin anytime soon.”
Featured Image: Shutterstock/Mayuree Moonhirun