Bitcoin in the Aftermath of COVID-19: Two Possible Scenarios

Futurist and author, Daniel Jeffries, shared with Cointelegraph his view on the future scenarios awaiting Bitcoin in the aftermath of COVID-19. 

Two possible outcomes 

In one particularly dark scenario,  the global economy will plunge into a severe recession and countries will turn to authoritarianism in order to survive. 

In such a scenario, world governments will impose capital control measures, curbing citizens’ financial freedoms. Authorities will then crack down on cryptocurrency to prevent people from circumventing their restrictions. Jeffries does not believe that Bitcoin would be able to survive in such a scenario. He stated:

“Governments will swiftly move to destroy all centralized exchanges and local Bitcoin operations. Then how much is your crypto worth? It's worth nothing.”

In fact, according to Jeffries, Bitcoin is still “an early alpha technology”. 

In an alternative scenario, a COVID-19-induced global crisis could also accelerate innovation, pressuring crypto to evolve into a complete ecosystem which offers goods and services on a large scale, and “not just money”. 

Jeffries invited the crypto community “to think more comprehensively”. 

“You have to think about it at a macro scale. You have to think about buyers and sellers. You have to think about the average user.” He said, continuing that, “You would need to think about alternative distribution mechanisms and scale. It’s not enough to solve just one of these problems. You have to solve all of them in order to build a robust community”. 

Bitcoin beyond the safe haven narrative 

To Jeffries, the narrative of Bitcoin as a safe haven asset was disproved in the latest market crash. Still, Bitcoin can be valuable as a proof-of-concept for other crypto technologies. He noted that the value of Bitcoin resides in:

“The idea that you could build a decentralized consensus system without a centralized power behind it and that you could make that system work over a significant period of time.”

The world is well prepared for COVID-19 

Jeffries’ forecast is overall optimistic. He pointed out that the world is better prepared than ever to face a global pandemic. In particular, communication technologies allow us to spread vital information for fighting COVID-19 at a speed that was unthinkable in the past. The global supply chain also provides many countries with the materials and goods that they need to face such crises. 

“Our interconnectedness, while it certainly spreads the virus quickly and accelerates it, it also accelerates the response in our ability to coordinate information at a global scale in a way that has never happened in the past.”

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