RATE Group | Bitcoin and Gold: Evaluating Hard-Cap Currencies in Times of Financial Crisis
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Bitcoin and Gold: Evaluating Hard-Cap Currencies in Times of Financial Crisis

24 Mar Bitcoin and Gold: Evaluating Hard-Cap Currencies in Times of Financial Crisis

Posted at 03:48h in Bitcoin News by

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How would a bitcoin economy react to coronavirus? For now, we don’t know. However, we can turn to a proxy for insight: gold.

Bitcoin’s “digital gold” narrative has stuck well, namely because of the cryptocurrency’s low issuance supply schedule and a hard cap of 21 million bitcoins. In turn, theory on how a gold-based economy would react to an external shock such as the current global pandemic lends itself into a look at a future bitcoin economy.

As CoinDesk reported Monday, both bitcoin and gold rose on news of the U.S. Federal Reserve extending an indeterminate amount of aid to the private market. From a supply perspective, both assets sit still while the Fed feverishly tries to outpace COVID-19. 

“The Federal Reserve will continue to purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions,” the central bank said Monday.

With…

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