Coronavirus COVID-19 has spread around the world with cases reported in almost every country—but its wildfire advance has been outpaced only by its contagion on social media.
Coronavirus information, a toxic blend of truths and lies, is running rampant on Facebook, Twitter, WhatsApp and Instagram shared through memes, doctored screenshots and dodgy links.
Meanwhile, the economic ramifications of a coronavirus-induced shut down have triggered a surge of interest in scarce digital assets like bitcoin, with many aghast at central bank and Federal Reserve plans to flood countries with never-before-seen levels of freshly-minted cash.
Since the coronavirus COVID-19 first hit the headlines in early 2020, misleading and outright wrong information has been shared digitally but from February there has been explosion of coronavirus-related fake news.
The likes of Facebook, Instagram and Twitter have tried to stem the flow but on Facebook-owned WhatsApp and other end-to-end encrypted messaging services there’s no way to measure the scale of infection or slow its spread.
WhatsApp has become a breeding ground for unsourced and false claims during the coronavirus COVID-19 crisis.
WhatsApp groups with member counts stretching into the hundreds receive forwarded messages from other massive groups, from digitally-infantile seniors and from panicked teens alike.
Much of that misinformation is economic—grocery stores are closing, banks have run out of cash. But some accurate reports are so outrageous they would have appeared false to many as little as two weeks ago.
The Fed could mint not one but two $1 trillion coins. The U.K. government will pay 80% of wages. A global recession of record proportions is a near certainty and coming as soon as next month. Stock markets around the world lost trillions of dollars in value in a matter of hours.
This morning, the Fed promised an open-ended commitment to keep buying assets under its quantitative easing measures—effectively offering to buy the entire market if necessary.
As the COVID-19 crisis rolls on, with some forecasting lockdowns could last well into 2021, people are counting the cost of long-term business closures and unprecedented central bank stimulus.
“Extraordinary times require extraordinary action,” Christine Lagarde, the president of the European Central Bank, said last week via Twitter. “There are no limits to our commitment to the euro.”
“There’s an infinite amount of cash at the Federal Reserve,” Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, told CBS over the weekend. “We will do whatever we need to do to make sure that there’s enough cash in the banking system.”
Similar comments have been made by other senior central bank and government officials, driving the popularity of the “money printer go brrr” meme and leaving many economists concerned over the long-term consequences of the extreme measures.
The measures put in place to dampen the economic effect of the coronavirus COVID-19 pandemic echo those brought in to offset the 2008 financial crisis—measures designed to make a potentially catastrophic short, sharp, shock milder but at the same time much longer.
In 2008, the Western world broadly decided it would rather spread pain over decades than try to absorb the direct loss of jobs, capital and economic output the crash brought.
The same choice is being made now, though the situation has changed.
Measures enacted in the aftermath of the global financial crisis remain in place, limiting policy-makers effectiveness. The world has become more globalized, hobbling individual government’s ability to act. Social networks have digitalized and decentralized the media.
Perhaps most importantly, bitcoin, created in the midst of the last economic crash, has shown there is a possible alternative to the central bank-controlled debt-based economy—an alternative that is yet to be truly tested, however.
The enthusiastic, seen by some as boarding on desperate, spending by governments and central banks has already pushed many toward bitcoin.
“Up to now, gold has been known as the ultimate safe-haven asset, but bitcoin—which shares its key characteristics of being a store of value and scarcity—could potentially dethrone gold in the future as the world becomes increasingly digitized,” said Nigel Green, the chief executive of financial advisory group deVere.
In China, the search engine Baidu has seen a rise in searches for “bitcoin”—up 183% over the past thirty days, according to local reports.
Google searches for bitcoin spiked ahead of the traditional and crypto market crash, more than doubling from the start of the month.
Meanwhile, many bitcoin and crypto exchanges have reported a surge in users and trading volumes.
“Despite the market downturn, Binance.US is seeing unprecedented trading volumes, with especially active trading in bitcoin,” said Catherine Coley, chief executive of Binance.US, part of the world’s biggest bitcoin and crypto exchange, Binance.
“Bitcoin’s recent jump while the rest of the market tumbles proves that unlike traditional companies, bitcoin can and will survive without bailouts.”
The bitcoin price, which plummeted along with almost everything else earlier this month, has rebounded even as stock markets around the world continue to fall—underscoring bitcoin’s reputation as an uncorrelated asset.
“Bitcoin will continue to be volatile over the next few months but the macro backdrop is why it was created,” bitcoin advocate and founder of bitcoin and crypto hedge fund Galaxy Digital, Mike Novogratz, said via Twitter after warning just last week confidence in bitcoin has “evaporated” following its price crash.
“This will be and needs to be bitcoin’s year,” Novogratz added.
For better or worse, and regardless of whether such measures are justified by the coronavirus crisis, the Western world is heading for the largest crackdown on civil liberties it’s ever seen—coupled with the largest ever increase in the Federal Reserve’s and central bank’s balance sheets.
Bitcoin, a borderless and permissionless substitute to government-sanctioned fiat money, is going to be in high demand in the post-coronavirus world.
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