Some have even claimed stimulus checks are being used to buy bitcoin. trading volume since the coronavirus crisis began.
Many bitcoin and cryptocurrency exchanges around the world have reported a surge of new users and. MORE FROM FORBES Is 2020 The New 2017? Bitcoin Could Be This Year's Best Performing Asset By Billy Bambrough Bitcoin proponents have long argued bitcoin and other cryptocurrencies will become more attractive in an inflationary environment. National Economic Council, wrote in a Financial Times op-ed last week.īitcoin is a scarce digital asset, meaning it has a fixed supply-topping out at a maximum 21 million bitcoin tokens. "The slow rise of digital currency has been given a gigantic boost by the pandemic," Gary Cohn, a former advisor to president Trump and one-time director of the U.S. "In terms of tail risks not being focused on, inflation is definitely one of them," Gopi Karunakaran, a money manager at Ardea, told Bloomberg.Īmid building fears over runaway inflation, the coronavirus pandemic has pushed some toward digital currencies such as bitcoin. The latest data shows over 30 million Americans filed for unemployment in the last six weeks. This "surge in inflation" could take the likes of Trump, the Fed, and other central banks around the world off-guard as they focus on more pressing matters. "The answer, as in the aftermath of wars, will be a surge in inflation, quite likely more than 5% and even in the order of 10% in 2021, assuming that the pandemic gets tamed by the end of this summer-the longer the outbreak takes to tame, the weaker will be the ensuing surge in real activity and then inflation." "What will then happen as the lockdown gets lifted and recovery ensues, following a period of massive fiscal and monetary expansion," asks Manoj Pradhan, founder of Talking Heads Macroeconomics, and Charles Goodhart, emeritus professor at the London School of Economics, in a paper published on the Centre for Economic Policy Research's Vox policy platform. Others have echoed Roubini's concerns, with some warning of a more serious inflationary shock. to go through a difficult recovery over "two or three years," into an inflationary period, followed by a depression. Roubini expects the post-coronavirus U.S.
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