bitcoin-navigation-on-the-recent-global-economic-crisis

Bitcoin Navigation on the Recent Global Economic Crisis Demonstrates that Cryptos are Here to Stay

Across the globe, over USD 30 billion have been invested in cryptos and Web3 startups by venture capitalists in 2021. Institutions such as Block, Tesla, and MicroStrategy are already adding Bitcoin to their balance sheet. 

These figures are astronomical and pretty impressive; factoring in the fact that BTC was only introduced recently in 2008. Since then, each coin has gained a value of about USD 41,000 by the time of writing this post.  

2021 was a boom for Bitcoin as the blockchain ecosystem expanded to include NFTs and decentralized finance (DeFi). This is presenting new opportunities for enterprises and investors, but some challenges were also notable as 2021 came to a close. 

The geopolitical conflicts in Eastern Europe quickly spilled over, opening unprecedented tests for Bitcoin. In the early days of the Russia-Ukraine conflict, evidence suggested that Bitcoin was still seen as a safe option for investors. 

Institutional Involvement Pushing Growth Ahead

More institutions are expressing interest in Bitcoin and the entire crypto landscape. In addition, trading platforms, such as Coinbase are injecting more funds into crypto projects. For MicroStrategy, the focus is buying BTC to grow its balance sheet. 

Others are designing tools to help with the broader integration of cryptos into their economies. One example is Silvergate Capital. The company runs a network that supports 24/7 remittance of euros and dollars. To do this, Silvergate bought Stablecoin assets from Diem Association.

Block, a financial services company, is reported to be looking for apps for daily use to serve as an alternative to conventional money or fiat currency. Google Cloud also unveiled its own blockchain to assist clients in adopting new technologies.

The Utility of Bitcoin Amidst Geopolitical Tensions

The most significant use of BTC is the fact that it can be used as a force against diverse factors that can result in an economic recession. According to Maxim Manturov, the head of investment advice at Freedom Finance Europe, Bitcoin was immediately made the legal tender in Ukraine following the Russian invasion in 2022. President Zelensky signed the legislation on “virtual assets” on February 17th, 2022.

Under the new law, the National Bank of Ukraine and the National Commission on Securities and Stock Market (NSSM) are allowed to help regulate virtual assets. Ukrainian companies are also free to work with crypto-assets, pay taxes, open bank accounts, and provide services. 

This move also opened the channel for Ukraine to receive a humanitarian crisis in Bitcoin. The decentralized nature of BTC makes it possible to use for emergencies across the globe, especially when complications devalue the local fiat currency. 

Bitcoin to Become the Mainstream

Although BTC is only 40% away from the high it reached in November last year, there is a lot of faith in it. According to Deloitte, 88% of top executives hold the view that blockchain technology will become the standard option in the finance industry.

Note that this acceptance has only emerged after the BTC blockchain reached global recognition. Since then, new frameworks and assets, such as non-fungible tokens (NFTs) and DeFi, have added to the sample of what blockchains can offer. 

While it is too early to predict where the crypto space is headed, one fact is that Bitcoin’s technology is playing a huge role in helping out during a crisis. This shows there is enough potential for the asset to outgrow the expectations in times of turmoil. So, cryptos are here to stay. 

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