Drop in the speed of money could affect Bitcoin

The crisis generated by the Coronavirus is far from over. For, although a vaccine seems to be imminent, and most countries are trying with more or less success to reactivate themselves. It seems that the economy will continue to suffer the effects of the pandemic for the foreseeable future. This is more than clear with the fall in the speed of money, which could affect Bitcoin according to the analyst known as PlanB.

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The fall of the speed of money
The Coronavirus is probably the worst crisis humanity has faced in at least a century. Well, the disease born in the city of Wuhan has not only affected people’s health. It has caused the collapse of the economy of almost all countries. They suffer to balance the effects of quarantine with the need to keep the economy working.

This has led the world’s major governments to implement multi-billion dollar stimulus plans. With which they hope to avoid the worst effects of quarantine on the most vulnerable population. At the same time they allow the production and commercialization of goods to continue in their countries.

And one of the governments that has put the most money into such plans is the United States. It has invested billions of dollars to keep its economy afloat. Yet when we look at the speed of money in the United States, we see a collapse of money compared to previous years.

The speed of money represents the average speed with which a new unit of money is spent. What this collapse tells us is that, despite the amount of dollars injected into the economy, consumers are not buying services and goods, the ultimate goal of any stimulus plan.

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The effects on Bitcoin
Therefore, from these data we understand that the state of the American economy is still extremely fragile. So, we can expect the economic crisis to continue to deepen, at least until a vaccine is developed. Allowing countries to open up and workers to return to their companies.

This would coincide with the opinion of the cryptoanalyst PlanB, for whom the collapse in the traditional economy ultimately benefits Bitcoin. Weakening fiat money and making cryptomoney more attractive to consumers. That’s why, upon news of the drop in the speed of money, PlanB launched a tweet with the phrase „phase 5“. It refers to the path that will lead Cryoto Engine to become a world currency.

However, so far we haven’t seen the radical increase in the adoption of Bitcoin and the other crypto currencies, which has been expected since the beginning of the pandemic. So, it’s clear that we’ll have to wait even longer to know the effects that the drop in the speed of money will have on Bitcoin. Which makes it our Tip of the Day here at Crypt Trend.