Bitcoin (BTC) – Yesterday, Trump announced that the U.S was slapping tarrifs on Turkish steel and Aluminum. This crashed the Turkish currency by over 20% within a few hours. However, unlike in the past when such panic selling would drive investors into Gold, this time round people rushed to crypto. At some point in the day, Bitcoin was trading at $7000 in Turkey. That was $500 higher than the actual price of bitcoin (BTC) at that point. Ethereum (ETH) was also trading at over $50 above its normal price.
This goes to show that people are increasingly confident that cryptocurrencies have the potential to hold value in times of economic uncertainty. There is growing confidence that in case there is a fiat meltdown, cryptos can be a viable alternative. This confidence is reinforced by the fact that cryptos are in a bear market at this time, yet people are willing to put trust in them over any other asset class.
For any crypto investor, this should be a massive heads up, that this new asset class may be volatile, but it is also growing in acceptability by investors all across the world. This means that if there were a global economic meltdown like the one that happened in 2008, the amount of money that would flow into crypto, would be in the trillions of dollars. It could mark that the point at which, the crypto market rallies above the $1 trillion mark. But is there really a possibility of such a global economic apocalypse? Well, a quick glance at the global economy at the moment does not paint a very good picture of the future.
First, the current trade wars are creating an unfavorable environment for global trade. Though the effects may not be immediate, after a while most multinational corporations will start struggling with profitability due to disrupted global operations. At the same time, when Chinese made goods become more expensive in the U.S due to tarrifs, consumer demand will reduce and this could hamper corporate revenue growth.
Add to that the fact that interest rates are on the rise in the U.S and Europe. When you couple this with the systemic risks posed by certain European countries such as Italy, and rising oil prices, it’s not hard to see that the catalysts for a global economic crash are slowly aligning themselves. There is an even bigger risk that most countries’ currencies would become worthless in such a crash due to unsustainable debt levels that are unprecedented in history.
In essence, the world look set for a scenario where there will soon be a global rush into cryptocurrencies. If bitcoin can trade at a premium simply on the basis of steel tarrifs, how high would it go if the global economy were to enter into panic mode? It would be huge, right? At such a point even $1 million Bitcoin (BTC) could easily become a reality. And since altcoins follow Bitcoin, then your favorite altcoin could easily be worth 10’s of thousands of times what it is worth today. Therefore, with all the current happenings in the global economy, stocking up on crypto at current prices could be a life-changing decision in the future.