While all-time highs are seen in global stock markets, according to economists, the global economy is approaching a serious recession period. A number of indicators point to global financial failure and governments cannot stop it. So, can Bitcoin come in at this point?
At this point, the ever-growing debt rates and globalization of the economy are the most striking issues. Both of these major problems point to an impending recession, and the tools used to solve them are no longer sufficient.
Debt and Disconnection
Global debt has reached serious levels. Currently, governments have $ 244 trillion in debt, and this figure is the highest ever.
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According to the statements, the debt has reached this level, largely due to the central banks trying to reduce stagnation in monetary policy. Policies such as lowering interest rates and quantitative easing to increase liquidity have increased debts. According to economists, a recession that will start in 2020 can make the global economy much worse than it is today.
In addition, the world economy has started the period of deglobalization, that is, the rejection of globalization. Take, for example, the separation of Britain from the European Union and the trade wars between the USA and China. Both reveal a fundamental disconnection between world economies.
Whatever he thinks about globalization, it has helped the economy to rise before. Even in a complex situation like coronavirus, the global economy was able to maintain trade and activity. Politically reversing this stability can lead to disaster.
Way Out: Bitcoin
Bitcoin offers a potential solution to this chaos. Since the digital currency can operate both as a “safe haven” asset and as a payment platform, it can provide both liquidity and stability.
As a payment platform, Bitcoin can be used to pay for transactions made by any organization. This provides global liquidity and can reverse the trend of deglobalization.
As a safe haven asset, Bitcoin offers a value storage tool that is not affected by government fiscal policies. No central bank debt can cause Bitcoin to inflate its numbers. In this way, Bitcoin can provide global financial stability.