The magnitude of impact that the ongoing COVID-19 pandemic will end up having on the global economy has yet to be seen. It is expected to be a devastating blow and could push the world into a recession or financial crisis when all is said and done. Goldman Sachs Group Inc. has predicted that advanced economies could feel as much as a 35 percent pinch.
This figure is predicted for Q2 and indicates a 35 percent drop from Q1 of 2020 when the virus was only just starting to take root. The expected fall for advanced economies is massive. In context, this prediction is four times larger than what was seen during the 2008 financial crisis, which previously held the record for this metric.
Meanwhile, the cryptocurrency space and correlation with global risk assets is weaker than many think., in particular, are still being predicted to rise even amid the global pandemic for a number of reasons. Bitcoin may have dropped in time with the beginning of the stock market fall in the middle of March, but its
Chart shows prices of US tech stocks, US treasuries, gold and bitcoin during the current round of panic.
Three of these are strongly correlated during times of stress. The fourth does its own thing.
The chart illustrates how unreliable bitcoin correlations with risk assets are. pic.twitter.com/NDhvvBsnex
— Alex Krüger (@krugermacro) February 24, 2020
In about a month’s time, Bitcoin will undertake its third mining reward halving. This event will put a strain on the mining efforts of the coin, but if history is anything to go on, BTC is expected to rise substantially in value.
While Goldman is predicting a drastic fall in economic strength, many respected cryptocurrency analysts, commentators, and predictors are expecting an upward trajectory after the May halving date.
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