Bloomberg recently produced a brief summary of events related to Bitcoin (BTC) and the global economy against the corona virus. Basically, the question to be answered is: Is Bitcoin a good investment?
What does Bloomberg say about Bitcoin?
For those who don’t know, Bloomberg is a finance, software, data, and media company founded by Michael Bloomberg in 1981. And in 1990, Bloomberg News was founded with the aim of sending financial news to subscribers to the Bloomberg terminal.
Without a doubt, the Bloomberg platform has over the years managed to gain a significant user base for the transmission of financial information.
With that in mind, we can see the importance of these messages about Bitcoin.
Bloomberg’s note puts us in the current context: the global economy is struggling with the corona virus through money injection, while Bitcoin is about to halve its third.
Inflation? Who or what will save us?
As already explained in CryptoTrend, Bitcoin was on the 11th of May before its third halving. This particular event was different from the previous ones, and the reason, simply explained, is the context in which it occurs.
Bloomberg reminds us that Bitcoin Halving, as many of us already know, is aimed at protecting the cryptocurrency from inflation. There is a limited amount of inventory, no more and no less, and so it is up to anyone to decide whether or not to create more BTCs.
Therefore, we have a cryptocurrency that is becoming scarcer over time as governments decide to give significant impetus to strengthen the markets and global economy.
In this sense, Bloomberg emphasizes a worrying reality: central banks are lowering interest rates and buying bonds (cash injection), while governments are investing huge sums to cushion the impact of the virus on the economy.
Obviously, the event has caused excitement among Bitcoin fans, as many consider it time to shine for the cryptocurrency.
In fact, Jean-Marie Mognetti, Executive Director of CoinShares, is quoted by Bloomberg as saying: “Bitcoin, a digital currency whose offer is programmatically defined to shrink to its maximum supply, seems to be the perfect hedge for any portfolio of institutional investors.”
Welcome to the bunker
The context has prompted many to see Bitcoin as the bunker necessary to survive the apocalypse or even the missile that will send us to a habitable planet after consuming Earth.
Many of us saw this before the crisis. However, the most important welcome for the ship or the bunker are institutional and traditional investors.
One of the key recent entries was that of Jones from Tudor Investment Corp.
As we mentioned at the time, this is a traditional investor who has decided to turn to Bitcoin as a possible safe haven in the face of the crisis.
In the report in which Jones reported on his latest and controversial bet, he affirmed this “We are witnessing big money inflation.”
Obviously, such an investor offers a cryptocurrency vote of confidence that will increase sentiment on the crypto market.
Bloomberg quoted Simon Peters, an eToro analyst, who found that Jones’ move might encourage other high-profile names to be used to support Bitcoin.
It’s a question of numbers: “Bitcoin was one of the best performing asset classes of the year,” Bloomberg noticed.
“It’s an obvious option, but people still don’t know that they have that option. #Bitcoin ”, Tyler Winklevoss remarked in response to a user finding their trust in math and science rather than in their government.
The impact on inflation remains controversial
Although Bitcoin currently seems to be all we need, we cannot be entirely sure.
The effects of government and central bank action on inflation are a hotly debated topic.
Bloomberg notes that coronavirus is actually currently having a disinflationary effect on the economy. However, there are two options:
First, and probably the one we hear the most, we will see significant inflationary pressures in the long run.
Second, the upcoming global recession could deepen disinflation trends.
Accordingly, Jerry Braakman, chief investment officer of the First American Trust, quoted by Bloomberg, expressed an opportunity. In particular, he noted that BTC only acts as a hedge against inflation if inflation skyrockets.