The consequences of COVID-19 are expected to exceed that of the 2008 recession, as well as the Great Depression, and global economies are facing unprecedented and uncertain times. The economic shock reverberating around the world has forced governments to act quickly and implement policies and, with the effects of the pandemic permeating every aspect of society, many businesses are preparing to navigate in a new world, post-health crises.
But what will an economic downturn mean for blockchain and cryptocurrencies? We have gathered commentary from a range of industry experts (below) including the Gibraltar Stock Exchange, Ontology, DeFiner, CRUXPay, and NEM Ventures who shared their insights on what a global recession could mean for digital assets.
Nick Cowan, CEO of the GSX Group, said: “Cryptocurrencies are not immune to market turbulence, with natural fluctuations illustrating regular asset class behavior in so far as smart money trading and herd mentality tendencies are clearly visible in the market. The dizzying price high that defined late 2017 was an unrealistic representation of BTC and the subsequent price drop painted a picture of high volatility. However, since then, market patterns have been generally positive, with normal peaks and troughs along the way.
In terms of a post-pandemic market, I don’t expect cryptocurrencies to suddenly become a fixture in the safe haven category with gold for example. Rather, adoption levels will continue to increase, particularly as major financial institutions and fintech platforms continue to show interest in this asset class. However, the idea that blockchain-powered finance is limited to cryptocurrencies is passé, and there are other significant developments enabled by blockchain that will broaden global liquidity pools, specifically the proliferation of tokenized or digital securities.
As we emerge from this global pandemic, I would also expect to see a considered reevaluation of the…