A recent report by Binance raised many questions about crypto market recovery, especially when trillions of dollars of fiat currency is being injected into the global market to counter the impending recession. The US government has planned to inject $5 trillion into the economy to fight the rising unemployment rate and job losses. Similarly, the South Korean government initiated the idea of cash payments.
Investors had started considering Bitcoin as a safe haven asset. However, the recent plunge from the $9000 range to $3000 range and then rising to $6000 range has changed the mindset of the people. The report from Binance revealed that approximately 21% of the respondents had this change of opinion in this crisis.
Crypto market recovery hindered by gov’t regulations
The governments of all the major countries have released new stimulus packages which ultimately mean that they are printing more money. The whole concept of money being printed goes against the idea of decentralization- the underlying principle of blockchain and crypto.
Reports show that BTC/SPX has been on a decline while the BTC-Gold correlation has surged significantly. The worst part of the plunge was that no one saw it coming even when the virus had affected most of China.
Is crypto market recovery impossible? Reports say no
When Bitcoin came back to the $6000 range, it started to stabilize its grip. After Bitcoin stabilized, other altcoins also showed stable behavior. Before that, the crypto market was experiencing free fall and the sell volumes remained quite high for a couple of days before it finally touched $6000 range.
Overall, according to the report, the crisis which led to new government policies can have a positive and a negative effect simultaneously. Although injecting fiat money is against the principle of decentralization, more and more people have started to think Bitcoin as another investment vehicle, especially when it has attained stability.