Original title "Fear and Greed, Money Evolution in the New Crown Epidemic"
Jeremy Born, founder and CEO of encrypted data and analysis platform CoinGenius, wrote in Cointelegraph on the development of the global economic situation and the development of future currencies under the influence of the new crown epidemic.
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He believes that the new crown epidemic will not end soon. Fear and anxiety have surged in society, and nearly half of people in the United States believe that the new coronavirus has damaged their mental health. People feel fear, anxiety, frustration, and powerlessness, unable to sleep all night.
China ’s new crown epidemic has eased, and Italy ’s isolation policy has sent people to other European countries. In the United States, the governor of California first responded, and New York is now at the center of the crisis. In Hong Kong, the epidemic was once brought under control, but after the society was restarted, there was a re-infection, and the same thing will be repeated worldwide. Australia is preparing to implement a six-month crisis measure, and they clearly understand this.
Born expects that there will be a period of economic decline in the world. The International Monetary Fund (IMF) announced that the world economy is in recession, but the numbers show that we have entered the Great Depression. The Chinese economy has been heavily invested in a real estate bubble destined to burst, and the amount of US Treasury bonds is also soaring. All this is just the tip of the iceberg.
He pointed out that fear, uncertainty and doubt are causing damage to the economy. As early as the Great Depression in the 1920s and 1930s, people did not need to worry that one-third of the labor force had no employment options. The problem has just begun.
Born said he conducted an experiment with his colleagues at CoinGenius, entered a bank branch and demanded to withdraw $ 100,000 in cash. He told bank staff that this was for personal reasons. Bank staff said it would take two weeks to get the money. When the money is deposited in the bank, the ownership of the money will be transferred.
The new crown epidemic compounded the problem. In the United States, the National Defense Production Act requires companies to participate in the war against the epidemic, and the federal government has been given unprecedented power. This will change human behavior. Once all the dust is settled, the world will be very different. China will have more soft power, social capital and economic power. The new crown epidemic is only a catalyst, allowing the global financial crisis and the new global order to arrive sooner.
He mentioned that as happened in 2001, 2008, 2011 and now, the market is under tremendous pressure, the Dow Jones Industrial Average fell, U.S. Treasury bonds fell, bitcoin and crude oil also fell, and people are outside Wait and see. When everyone is watching, a lot of redistribution will soon occur. Before that, the US dollar will appreciate, but once the US debt burden becomes the headline, this situation will be reversed. Because the yield on US Treasury bonds is negative, the former safe-haven assets suddenly look less secure. During this crisis, asset redistribution will be faster than in 2008.
Born said that the debt-based world we created cannot work, we must focus on education and planning, and stick to our own ideas. In the recent stock market crash, all assets have fallen because people want to wait and see. The new crown epidemic has led to 6 trillion dollars in economic stimulus measures, and many people are expected to increase to 10 trillion dollars. Like gold and silver, Bitcoin with a total circulation of 21 million is also a commodity, and its value is the money people are willing to pay for him. On the other side of the crisis, people may be willing to bet more on it.
Wall Street will eventually seek alternative assets, and they have other options besides gold and silver. Now that they own Bitcoin and cryptocurrencies, they have begun to consider these alternative assets. News about the digitalization of the US dollar and the blockchain-based supply chain is spreading in the media. Everyone now works from home, using apps like Slack and Zoom. With the advent of the digital revolution, they will also see the benefits of the encrypted world.
Born mentioned that he had talked to family offices and hedge funds around the world. They saw the value of Bitcoin. Supporters of these institutions bought bitcoin when it fell to $ 4,000. More institutional capital will use it as a means of diversified investment, if not as a store of value. They want to get rid of traditional assets, they want commodities like dollars, precious metals and cryptocurrencies like bitcoin. Nonetheless, Bitcoin is currently not a suitable safe-haven asset. It is still a hedging tool for speculation, which is why it will continue to depreciate along with other assets during periods of extreme panic.
Cryptocurrencies are becoming tempting, as is the underlying technology blockchain. In California, there are already counterfeit new coronavirus detection kits and masks, and the blockchain-based supply chain can bring the required transparency. New crown virus information can also be more effectively shared with blockchain-based systems. Competent departments in different regions need to aggregate information together, and the implementation of enterprise blockchain can make this information available in real time.
He pointed out that when we recover from this crisis, the public will need more reliable sources of information. They need the transparency that blockchain brings. Entrepreneurs and large enterprises will work together on open source projects, which will set standards for the next decade. If people are unable to participate in polls because of the new crown virus, insecure digital voting may threaten our democracy. The secure voting based on digital blockchain can reduce the risk of election fraud.
Born believes that another challenge is to maintain a positive attitude during difficult times. Humans are probably the most social creatures, so they need social interaction and staring at each other. Fortunately, technology enables us to do this. When you are afraid, anxious, depressed, on the verge of collapse and having difficulty falling asleep, please know that you are not alone. New technologies will help people get together and share information about everyone in an unstable state.
Image source: pixabay
By Liang CHE
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