Although we are only in the past few months in the ongoing COVID ends-19-recession, has pointed out, this supposedly clear structural problems in some of the largest institutions of society.
One of these Formations that is claimed to be threatened, the European Union and thus the Euro.
The collapse of this multi-national Organisation, and your domestic currency would plunge the financial and political world is undoubtedly in a mess. Also Bitcoin would be affected in the following manner.
The Euro before the collapse of prominent macro-economic analysts
According to Remi Tetot, co-founder of the macro-economic research company Global Macro Investor, chances are good that the “Euro is in the near future Broke”.
The arguments for this claim are comprehensive, but they spring mainly from the fact that the European Union is proposing a massive stimulus package to rescue the economy from COVID-19, the European Central Bank is printing hundreds of billions and on the verge to fall under a technical support.
Tetots colleague Raoul Pal is the Euro compared to the same pessimistic, if not even more pessimistic.
The former Manager of Goldman Sachs says in a Video that was sent to him-driven financial media company Real Vision: He thinks the EU (and the Euro) for an “Experiment” that was on the verge of collapse.
Pal cited the fact that due to the ongoing recession, member States will have to contend with intense fiscal and monetary difficulties, as COVID-19, has affected every economy in the Eurozone in different ways.
Normally, other countries in the Euro zone would step in to help (such as Germany, Greece has helped in the last decade,””) – however, there were increasing tensions between the member Nations. The Wall Street Veteran believes that these tensions and the discourse could contribute to the dissolution of the Union.
How will Bitcoin respond?
According to Travis Kling – CIO of Ikigai Asset Management and former portfolio Manager of Point72 – would be the dissolution of the EU as we know it, an immediately catastrophic effect on Bitcoin:
“If the Euro looks as if he would collapse, then it’s probably a BTC Crash (global massive risk-off)”
In principle, it makes sense. The collapse of the European Union would impact many Nations with huge debts, while the resolution of the Euro would disrupt the global financial system dramatically, as new commercial and social systems to come into force.
In the long term, Bitcoin could benefit, however, as investors flock in the midst of a currency crisis, flocking to safe investments. Kling explains:
“When people are on ‘Hyper-Bitcoinization’ talk, I always had the feeling that a collapse of the EUR, the most likely and the fastest way to get there”
He refers to the Conviction of the Bitcoiners, that the macroeconomic environment will eventually reach a point where BTC Fiat currencies absorbed.
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