On February 17, the Dow Jones Industrial Average was near its peak at 30,000, driven by the longest US economic expansion in history. During that time, bitcoin was trading above $10,000. Over the next thirty days, the coronavirus (Covid-19) burst out of China with major outbreaks in Italy, South Korea, France, Spain, Germany, the UK, and the USA.
As countries shut down their borders and people were asked to be quarantined in their homes, businesses came to a sudden stop. The stock markets went into a meltdown and forced central banks to take emergency actions not seen since the 2008 global financial crisis.
The world’s leading cryptocurrency also crashed to $3,850 which was because of those relatively new to crypto who sell when they feel there are risks. Also, those who depend on short term gains in their investment portfolios to pay rent were forced to sell crypto to cover their living expenses.
According to the founder and CEO of Binance, Changpeng Zhao, when people fear the doomsday, they hoard cash with increased pressure to sell investments. But they will “eventually find out they no longer need to hoard it and will put it back on investment.”
But despite this Zhao isn’t “worried about crypto at all.”
“The fundamentals did not change. Unlike fiat, bitcoin remains a currency with limited supply. No one can print more of it. Demand is increasing, especially now. It will be fine,” said Zhao.
I am bullish now, I was bullish yesterday, and I will be bullish tomorrow.
— CZ Binance 🔶🔶🔶 (@cz_binance) March 20, 2020
Things aren’t black or white but greyscale and fundamentally crypto still works and with fiat being printed at a record pace, “you decide what will happen, in time.”
But that would happen eventually as Zhao explained currently, “Markets are inefficient. The speed of change propagation is slow, which actually gives us plenty of opportunities.”
Binance founder is extremely bullish on Bitcoin and cryptocurrencies and the reason behind this is the broken current system which he said bitcoin fixes.
With central banks printing out money to bail companies out, “the taxpayers are robbed (made poorer) indirectly.” And bitcoin fixes this.
With cryptocurrencies, things are different because there are no government bailouts which he said, “breaks the cycle.”
But it doesn’t mean, problems will be magically solved as companies will still fall and users will still get hurt.