Brief essay on a possible impact of Covid-19 on the Bitcoin price

I don’t usually see myself as the author of half-baked conspiracy theories, a crude mix of half-truths and personal impressions, which then lead to the drawing of abstruse conclusions. Therefore, I would like to point out that the following article only reflects an opinion and should be perceived as such.

The global impact of Corona pandemic is hard to overlook. In addition to the almost complete cessation of social life, the closure of schools and universities, worldwide mass layoffs and the fallow of entire economic sectors, the economy is showing tentative signs of recovery from an enormous blow that has exposed the weaknesses of the global meshing of the economy as well as the neglect of the progressive development of the digitalization of processes, especially in Western society. The pandemic led directly to the lockdown of leading industrialised countries.

A substantial crisis with the danger of leading to a permanent global economic recession made its way through the so-called global supply chain like a riding lawnmower over the fairway of a poorly maintained golf course.

States and communities of states react very differently to Corvid-19, with different measures and recommendations having different impacts. But in dealing with state aid for industry, trade, the pharmaceutical industry and hospitals very similar: fast, unbureaucratic financial support.

Whether bonds, government bonds, aid purchases, shares, government aid or the provision of undreamt-of financial resources for medical treatment and research into medicine and possible vaccines, what they all have in common is that these resources do not exist. The money for this is still being “produced” and there is practically no significant economic performance to prevent this. Behind the next corner lurks the inflation monster of epic proportions.

The global economy and consumption are tentatively picking up again, but we will still be a long way from pre-Corona. Both decision-makers in industry and trade, institutional investment and private consumers have become very cautious.

From here on it gets fuzzy

I don’t think it is unlikely that, together with the annual wave of flu in the winter of 2020/2021, another large wave of COVID 19 disease will sweep across the world. This will be much more devastating than the first, despite all the preparation and previous recovery. And this time, markets and consumers will be virtually conditioned and all services will be shut down immediately in a global lockdown. Stock exchange trading and global financial flows will react within the shortest possible time.

Nevertheless, the inevitable collapse of the economy will have long-lasting effects. The economic crisis threatens to turn into a permanent global review. Financial resources will flow into investments that are as inflation-proof as possible. First and foremost, it will be gold, and some funds will be speculatively invested in shares of the supposed winners of the crisis, or perhaps in existing real estate and certainly in Bitcoin and other inflation-proof crypto-currencies.

Bitcoin is easy to buy, Bitcoin has built-in deflation mechanisms that make it inflation-proof, Bitcoin is independent of governments, banks and other institutions. As long as there is no substantial and lasting rescue insight for the global economy, institutional investors will drive the Bitcoin exchange rate to undreamt-of heights in mutual interaction with explosive inflation.

At the earliest, in winter 2021/2022 a vaccine against the virus called Sars-CoV-2 should be available and the spook could come to an end. Finances will gradually be released from the inflation-proof havens and returned to the global economic cycle. Forecasts of a Bitcoin exchange rate of 1 BTC to 100,000 USD to almost 300,000 USD seem more inevitable than likely with galloping inflation of the US dollar, EUR and CNY.

One thing is certain, we are living in interesting times. The global community is being tested, but surely both values and assets will shift around the world!