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Venture capitalist: 2020’s coronavirus crisis will only prove the value of Bitcoin and crypto

No market or facet of the economy has been spared amid the coronavirus crisis, crypto included.

Case in point: since the $10,500 high seen in mid-February, the price of Bitcoin has cratered by 36 percent, posting similar losses to markets like American equities and commodities (namely oil).

What’s worrying is that a V-shaped economic recovery that optimists were hoping for is believed to be unlikely to happen : consumer spending, especially spending on discretionary items, is likely to be much lower, even on the recovery, while it seems that the world has seen its worst unemployment shock since the Great Depression of the 1930s. Put shortly: the economy could soon be the weakest it has been in decades.

But, that’s where crypto begins to deviate from the rest of the economy: according to a number of prominent investors and analysts, the fundamentals and intrinsic value of cryptocurrencies are only being strengthened by this crisis, despite the waning prices of Bitcoin , Ethereum, and other digital currencies.

Related: A prominent trader makes the case for $8.5k Bitcoin before making new lows

This ongoing crisis could help crypto dramatically, says top investor

In a recent Twitter thread, Placeholder Ventures partner Chris Burniske, the analyst who coined the term “crypto-assets,” recently remarked that this crisis “will pass, and crypto’s fundamentals will have strengthened through it.”

Burniske highlighted how “new technologies rise as old systems break, and often it takes a crisis to reveal the flaws of the old system in full.”

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Indeed, Raoul Pal, a former executive of Goldman Sachs and the CEO of Real Vision, recently couldn’t “express how bullish [he is] on Bitcoin,” plainly stating how “all trust” in the “entire system” has been lost, leaving a power vacuum that is likely to be filled by a digital ecosystem that he has pointed to many times in interviews.

Galaxy Digital CEO Michael Novogratz followed suit. In an interview with CNBC Tuesday, he explained that “this is the time for Bitcoin,” citing they unprecedented, what-some-call “broken” monetary and fiscal policy response to the crisis:

“If there was ever a time — debasement of fiat currencies, monetization of trillions of dollars of debt, this is the time for Bitcoin.”

Indeed, on Mar. 24, Larry Kudlow, advisor to the White House, remarked in an official press conference that the coronavirus stimulus package is likely to exceed $6 trillion — a sum as large as 30 percent of the United States’ entire GDP, 900 million BTC, or enough money for $850 for every human being.

Related: The White House’s $6 trillion stimulus package is astronomically bullish for Bitcoin; here’s why

The expectation amongst some investors is that this will cause a strong bout of inflation that will boost the value for scarce and decentralized assets, including cryptocurrencies.

More downside still possible

Notably, while Burniske seems to be more fundamentally bullish on cryptocurrencies than ever before, he is open to the idea that Bitcoin will see some further downside, despite already falling to the $3,000s on the Mar. 12 capitulation event.

Per previous reports from CryptoSlate , the venture capitalist remarked in a recent analysis that there’s a good likelihood BTC revisits $3,000, citing the fact that the crypto lost the key capitulation level of the 200-week simple moving average and global assets seem to be on a downward slope:

“Lots of people asking where BTC bottoms. The short of it is I wouldn’t be surprised to see a retest of our 2018 lows near $3000.”

The post Venture capitalist: 2020’s coronavirus crisis will only prove the value of Bitcoin and crypto appeared first on CryptoSlate .

Categories: Price Watch
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