Why Bitcoin’s Navigation of Recent Global Economic Downturns Shows that Crypto is Here to Stay
Bitcoin’s Utility Amidst Geopolitical Tensions
Perhaps most significantly of all is how Bitcoin has recently demonstrated that its technology is capable of becoming a mitigating force against factors that can cause economic downturns.
To illustrate this, Maxim Manturov, head of investment advice at Freedom Finance Europe, notes how Bitcoin was swiftly made legal tender in Ukraine in the wake of the Russian invasion in February 2022:
“Ukraine has legalised cryptocurrency. President of Ukraine Volodymyr Zelenskyy signed the law ‘on virtual assets’ adopted by the Verkhovna Rada of Ukraine on 17 February 2022,” Manturov noted.
“The National Commission on Securities and Stock Market (NSSM) and the National Bank of Ukraine will regulate the market of virtual assets. What provision does the adopted law on virtual assets make? Foreign and Ukrainian companies will be able to work officially with crypto-assets, open bank accounts, pay taxes and provide their services to the people.”
Significantly, the move also helped Ukraine to set up an avenue to receive humanitarian aid in BTC.
Due to Bitcoin’s decentralized nature, the asset may help during national emergencies throughout countries around the world – particularly when economic complications lead to the devaluation of fiat currencies through hyperinflation.
The Road to the Mainstream
Despite Bitcoin still sitting some 40% adrift from its all-time high from November 2021 today, institutional faith in the cryptocurrency remains. Deloitte figures suggest that 88% of senior executives believe that blockchain technology will eventually achieve mainstream adoption.
It’s worth remembering that it wasn’t until recently that Bitcoin’s blockchain framework finally began to achieve the levels of global recognition for its technological framework that it deserved. Since then, we’ve seen the rise of DeFi and NFTs as a taster of what distributed digital ledgers can achieve.
Although it’s hard to predict just how the adoption of cryptocurrency will grow, and whether it may take another NFT-style emergence to act as a catalyst for more mainstream applications, the fact that Bitcoin’s technology is playing an active role in aiding economies in the face of an economic crisis shows that there’s enough potential for the asset to not only outlast its expectations but to outperform its benchmarks during downturns.
Although there are likely to be more twists ahead before the global economic outlook recovers, Bitcoin is already showing that its use cases can ensure that crypto is very much here to stay in one form or another.
