Many thought that the economy collapsing would lead to cryptocurrency taking off. This has not happened. In fact, Bitcoin saw a collapse that mirrored that of the financial markets.
At the same time, Gold has not take off like most would think given all that is taking place.
So what gives?
The answer to this question is wrapped up in the word "confidence". When the world is falling apart, people tend to gravitate towards what they know. Instead, of being speculative, investors find the safest asset they could.
What is ironic is that gold or silver were not the assets people flocked to. It is interesting to see how the USD was the safety valve.
Does this mean that the belief in crypto is dead?
Far from it. There is however a couple issues present that must be considered.
To start, the cryptocurrency market is still very small. The amount of money involved is just a minor fraction of the total global economy. Essentially, we are looking at a rounding error (to take from bookkeeping).
The other factor to consider is that cryptocurrency is still ideologically driven. The mainstream has not adopted crypto to any great degree. In fact, this is still something on the fringe.
Ultimately, use of cryptocurrency is going to come down to utility. Since few cryptocurrencies offer that, it is not likely that people will dive into then when panic is taking place.
On the positive, disruption often takes place as a result of crisis. Because of the impact, people are more sensitive to doing things differently. The financial impact of this present situation is going to be severe.
Perhaps we see more people opening up to the idea of cryptocurrency as a solution. The next couple years are going to provide an opportunity for developers to produce applications that the masses can start utilizing.
As a side note, the Brave browser seems to be making some headway. This is a prime example of a useful application can be interwoven with cryptocurrency to lead the masses in this direction.
In the end, my sense is that cryptocurrencies success will be based simply upon utility. The idea of speculation driving this industry appears diminished.
If you found this article informative, please give an upvote and resteem.
I read somewhere that the speed with which the stock market erased its value was actually faster than the crash of the Great Depression in the 1920's.
Gold is down, stocks are down, bonds are down, crypto is down... people are flocking to cash. More specifically, people are flocking to what they believe will buy toilet paper, pasta and a dozen eggs. The psychology of situations like these is that most people forget all about such constructs as "value" and "investing." Everybody slides a few rungs down on Maslow's Hierarchy of Needs.