- The founder of Cardano, Charles Hoskinson, describes that cryptocurrencies such as Bitcoin and Cardano are secure stores of value in a crisis.
- The chairman of the FED, Jerome Powell, announced that the United States of America will protect itself against the coronavirus and its consequences and support the economy.
Both the stock markets, cryptocurrencies or even the supposed safe haven gold showed a strong price drop in the last weeks. In the media, the coronavirus that has broken out in China is being cited as the alleged reason. The current developments on the stock market have caused a loss in the market value of all companies of more than six trillion USD.
Charles Hoskinson: Cryptocurrencies are a good hedge in a crisis
Bitcoin has been called digital gold by some industry experts and seen by many people as the only alternative to secure their remaining capital. Especially in crisis-ridden countries such as Venezuela, Argentina or Hong Kong, Bitcoin trading volumes reached historic highs, as inflation there has now severely destroyed the value of the country’s own fiat currency.
The founder of Cardano and CEO of IOHK Hong Kong, Charles Hoskinson, describes that cryptocurrencies will serve as a safe haven in a crisis, regardless of whether it is the corona virus or other factors:
Dear markets, just an FYI, crypto is the best hedge in the world against a global pandemic. Should SARS-CoV-2 get big, the stock market is done and governments will collapse. Things that live in the digital world are resistant to this and will benefit from the social change.
Bitcoin is currently struggling to reverse the trend, but the weak trading volume ensures that the price remains volatile. Meanwhile, key US economic officials have announced far-reaching measures in the event of a global coronavirus pandemic.
Jerome Powell: Will protect US economy with all our power
Meanwhile, Fed Chairman Jerome Powell has announced that the fundamentals of the US economy remain strong, but that the coronavirus poses increasing risks to economic activity. Powell describes that the Fed is keeping a close eye on current developments and will take action in case of emergency:
We will use our tools and act as appropriate to support the economy.
Investors currently hope that the Fed will initiate two further rate cuts to stimulate the market and stabilize the economy. Seema Shah, chief strategist of the asset manager Principal Global Investors agrees with this prediction:
The markets are now pricing in at least two rate cuts by the Fed.
Some investors think that a first rate cut could take place as early as March, but there is no official announcement by the Fed for the time being. It therefore remains to be seen how the markets will develop in the coming days and weeks.
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