The coronavirus pandemic has reversed the established quo with many corporations and industries still reeling.
The world’s largest banks have noticed their valuations falling, with billionaire investor Warren Buffett rescuing long-standing bank stocks this year and joining many other investors in betting on gold (although Oracle of Omaha still likes bitcoin).
As banks struggle in the post-Covid world, bitcoin and cryptocurrencies are expected to revel in an “acceleration of adoption due to a pandemic,” according to DBS lead economist Taimur Baig.
“The pre-pandemic call was largely speculative,” Baig told the online bitcoin news page and the Coindesk cryptocurrency. 1% of assets under control [in bitcoin]. But I think postpandemic is beyond speculation. Things have constant circulation, it won’t degrade. “People are worried about dollar loss and wonder if they deserve to keep crypto in addition to gold as a shelter currency. “
This year, several established high-level investors, led by the celebrated Paul Tudor Jones in May, have followed bitcoin, with its constant restriction of 21 million chips, as a possible coverage against inflation that foresees stimulus measures induced through the unprecedented coronavirus.
Baig comments on a report he wrote for Singapore’s banking giant last month that 2020 “is charting as a milestone in the history of virtual finance,” and the cryptocurrency is here to stay.
“It doesn’t make sense not to back down for public and personal virtual currencies,” Baig wrote, along with several of his DBS colleagues. “Both remain courageous new frontiers, with new use cases, technological advances and demanding situations appearing regularly.
Meanwhile, bank actions struggled to recover from the coronavirus-induced crisis in March, partly due to the central bank’s large stimulus measures put in position to compensate for the damage caused by the coronavirus pandemic. through the U. S. Federal Reserve, which is cutting interest rates and increasing its cash printers through quantitative easing.
“Low base rates reduce interest rates that banks can qualify on loans, and quantitative easing is also designed to level loan costs, resulting in credit spreads, the interest rate premium a company will have to pay relative to a government, also low. ” Russ Mold, leading investment officer of the AJ BellArray brokerage by email, said, adding that “central bank policies can unintentionally do more harm than smart when it comes to primary lenders” and “seriously undermine banks’ profits” and their ability to download decent stock yields. “
Bank stocks were severely affected in 2020 (the KBW Nasdaq Bank index fell by 33% this year) with a convenient central bank policy that added to investor considerations about the tens of billions of dollars that primary lenders have set aside to account for credit losses.
“Only the actions of U. S. banks have shown genuine life symptoms in recent years, however, the pandemic, a recession, and a reversal of the Fed’s policy of tightening to flexibility (and a relaxed policy until at least 2023) solved the challenge by 2020,” Mould said. .
On the other hand, locks, cash printing and stimulus measures have led many to bitcoins and cryptocurrencies. Bitcoin and cryptocurrency exchanges around the world have reported incredibly high trading volumes and an increase in the number of new users in recent months.
Meanwhile, others have already said that they expect the coronavirus pandemic to accumulate in bitcoin. In August, U. S. Congressman Tom Emmer said bitcoin was expected to “strengthen” as the world emerges from the coronavirus crisis.
“As we get out of the crisis, bitcoin won’t go away,” Emmer (R-MN) told bitcoin and cryptocurrency investor Anthony Pompliano, in an interview on the popular Pompliano podcast, adding that bitcoin and cryptocurrencies will “remain” increasingly important. “by its decentralized nature.
I am a journalist with significant experience in the fields of technology, finance, economics and business around the world. As founding editor of Verdict. co. uk, I pointed out that