As shutdowns aimed at reducing the spread of the novel coronavirus continue across the world, the global economic picture is becoming increasingly bleak. Here’s how this pandemic continues to change the cryptocurrency market.

In the US, the unemployment number has reached its highest level since the Great Depression of the 1930s, with one out of every six people out of work because of the virus.

In Europe, the situation is no better, with analysts predicting an unprecedented recession and subsequent economic repercussions that are far worse than the worst of recent estimates.

The problem with viruses – and money – is that there is no clear path.
Governments can’t just open up their economies and put their entire populations at risk (but they are, and it is). Even if economies reopen rapidly, there will be a number of factors – not the least of them being consumer vigilance.

People are scared and we will see companies operating in very low capacity. But, on the other hand, the longer things are put on hold, the more damage is done to the economy.

Governments stuck between rock and hard space.
Governments have turned to massive stimulus packages they hope will keep citizens and businesses on hold until the virus poses less of a threat.

When will this happen? At this point, no one knows. While some countries in Europe have slowly started trying to bring things back in motion. In the US, the virus is still spreading at an alarming rate and the government’s testing capabilities are well below what they need.

With the economy in what Paul Krugman called a “coronacoma,” and people increasingly finding themselves out of work, the US government has passed trillion-dollar emergency bills into law. The bill is for sending economic relief funds to citizens and companies.

To cover all this spending, the Fed is injecting new money into the economy at the fastest rate in more than 200 years. Meanwhile, as the Fed is pumping money in, the US national debt is heading towards $30 trillion.

US Expenditure
While public spending in the US has not been frugal over the past few decades, the recent growth has been unprecedented. And the longer everyday life is put off by the pandemic, the more prepared we are to drift into unknown territory.

As seen in the 2008 recession, the global economy has many interconnected factors that can collapse like dominoes if things go awry. Well, things are going awry now, and, as evident from Los Angeles Mayor Eric Garcetti’s announcement that LA will not fully reopen until a cure for the virus is found.

The prospects of putting things back together just aren’t very promising.
While the government’s response has been to keep the economy in artificial motion and pour money into it – there is concern that the Center may no longer be able to catch up.

The temporary relief afforded by the emergency measure may be welcomed in the short term. The danger lies in its consequences that it may cause further down the line.

What about bitcoin?
In a spectacular coincidence, while a simulacrum economy powered by newly minted fiat currencies is being deployed around the world. Bitcoin just held its third halving, an event that highlights the cryptocurrency’s inherent shortcomings.

Bitcoin and other major cryptocurrencies were not safe from the market crash caused by the coronavirus.
Back in March, the initial outbreak, caused by a drop in oil sales, caused a global economic shock that penetrated the crypto market and sent bitcoin reeling.

The native cryptocurrency lost more than 50% of its value in one day, and many saw this as evidence that the asset was too complexly tied to traditional finance to be considered a safe-haven.

Economically speaking, the modern world has never really faced an event of the same scale as this pandemic.

The outbreak of COVID-19 has forced all sectors to self-test and reconfigure.
This is far more true than in the oil industry, where all of OPEC’s strategy to play into the impasse was soon turned on its head by the effects of the pandemic.

After Saudi Arabia and the Russian side failed to come to an agreement at their summit in Vienna, both left the table realizing they could have an advantage over each other in the event of a standoff.

Both countries expected a prolonged drop in oil prices, but it was something they could afford if, in the long run, they could profit from it. To balance its national budget, Russia needs oil for at least forty to forty-five dollars a barrel.

In Saudi Arabia this price is about eighty dollars per barrel. So when the price of oil initially crashed and the ruble went with it, the Russian side was confident it could sustain losses long enough to gain an edge over its rivals.

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