The collapse of governments and fiat currencies is something that many Bitcoin fanatics hope for.
hey believe that such a collapse would prove the value of decentralized, global and digital value and information transfer mechanisms.
However, one analyst believes that Bitcoin can suffer extraordinary losses if the European Union collapse. He stressed that such an event could still have a positive long-term effect on the price of the asset.
To some people, it may sound surprising, but there are growing concerns that the EU could collapse, which would continue the trend that began with Brexit.
Tuomas Malinen , CEO of GnS Economics and a professor in Helsinki, explained on May 12 that ‘the collapse of the eurozone is almost certain’.
The main points in his publication were the following:
1 – With the decision of the German Constitutional Court on the central bank of the EU, the country gives indications that it may begin to withdraw from the Eurozone.
2 – Rescue programs that have been imposed in response to the economic turmoil caused by COVID-19 will inevitably lead to some degree of impoverishment in the euro area. This will strengthen the process in which better-off countries impose nationalist economic and social policies that undermine the effectiveness of the EU.
Raoul Pal, CEO of Real Vision and a former Goldman Sachs executive, expressed similar views in a publication calling the EU a political experiment.
He said that given the rise of nationalist sentiment in certain member states and the deteriorating economic prospects of countries such as Italy and Greece, the nature of the union itself is collapsing.
According to Travis Kling , chief information officer of Ikigai Asset Management and former portfolio manager at Point72, the collapse of the European Union will have a catastrophic effect on the price of Bitcoin.
“If the euro seems to be collapsing, then BTC is likely to collapse as well (massive withdrawal from risky assets worldwide) …”
As a result of the union, many members may have serious fiscal and monetary difficulties.
There is also likely to be a stock market crash, pushing Bitcoin – which has a positive correlation with the S&P 500 during economic turmoil – downward, with investors moving to more liquid markets.
But that won’t kill Bitcoin, Kling said. He states the following:
When talking about ‘hyper-Bitcoinization’, I have always thought that the collapse of the EUR is the most direct way to this […]