Due to the war that broke out between Ukraine and Russia, international relations are changing. The same goes for the global economic situation, which is also undergoing profound changes. As you might expect, the bitcoin (BTC) market was not spared.
First, bet on bitcoin (BTC)
As global conditions deteriorate due to the war in Ukraine, professionals believe the coming years will be even more difficult. Disruption of interconnected systems in place since the fall of the USSR in 1991 could lead to a return to fragmented supply chains , economists say .
The outlook is not necessarily positive for the future. It is for this reason that many investors, fearing the worst, are beginning to bet on other stocks. Indeed, consumer prices could rise as US inflation has already reached its highest level in four decades.
What elements are investors turning to? There are several, but the case of bitcoin (BTC) is the one that marks the most. BTC is considered by some investors as a hedge against inflation. Traders might see “de- globalization ” as another reason to bet on the biggest cryptocurrency in the market.
Next, understanding deglobalization
To understand de-globalization, you must already know what globalization represents. Globalization is not a new concept, it appeared several years ago. It corresponds to the tendency of States to encourage economic free trade and labor relocation policies.
In terms of globalization, the major principle was that of “comparative advantage”. In other words, a country might be able to produce goods and services cheaper than its trading partners. As a result, the cost of importing the products was relatively accessible.
Unfortunately, in recent years, globalization has been put to the test by various crises. Several events lead experts to believe that deglobalization is brewing: trade war between the United States and China, global coronavirus pandemic and war between Russia and Ukraine.
“The invasion of Russia will have direct repercussions on the world economy due to the contraction of Ukrainian and Russian exports, in particular energy, foodstuffs, fertilizers and other basic products”, he said . said US Treasury Secretary Janet Yellen in a speech on April 13. “When Russia made the decision to invade Ukraine, it predestined an exit from the global financial system. Russian leaders knew that we would impose severe sanctions. »
Since the war between Russia and Ukraine began, the world has gone from bad to worse. “Russia’s invasion of Ukraine is causing shortages of oil and gas, wheat, nickel, neon and all sorts of other goods,” said Erica Groshen, a former Federal Reserve Bank researcher. of New York. In this context, it seems that de-globalization is definitely underway. Cryptocurrencies could benefit from this.
