The effects of Covid-19 on USD and Bitcoin
- The BTC-fiat battle is witnessing a “flattening” as opposed to a "flippening" as COVID-19 impacts the global economy.
- As per research, while the BTC is leveling out its supply, USD is going “parabolic.”
The US Federal Reserve’s response to the COVID-19 pandemic has inflated the USD money supply when Bitcoin witnessed its supply cut in half. A chart of the US’ M2 money supply compared to BTC reveals that while Bitcoin is leveling out its supply, USD is going “parabolic.”
Robert Breedlove, the CEO of Parallax Digital, recently uploaded the chart on Twitter, which indicates the prominently different paths taken by fiat and Bitcoin since the global outbreak of Coronavirus in March. The recent halving event that took place in May caused a reduced supply of Bitcoin. At the same time, central banks have continued to announce stimulus programs that have inflated the supply of cash. This has resulted in Bitcoin displaying the kind of “flattening curve” that governments hoped to see in coronavirus cases. Breedlove said:
Bitcoin supply curve starting to flatten against a parabolic USD M2 money supply—what happens next?
M2 refers to the M1 money supply and what the Federal Reserve describes as a “broader set of financial assets held principally by households.” According to an earlier Cointelegraph report, Bitcoin’s recovery from its previous price crash demonstrated the resilience of its self-governing protocol. Q2 returns have topped 50%, making BTC the best-performing macro asset.
Author
Rajarshi Mitra
Independent Analyst
Rajarshi entered the blockchain space in 2016. He is a blockchain researcher who has worked for Blockgeeks and has done research work for several ICOs. He gets regularly invited to give talks on the blockchain technology and cryptocurrencies.
