Ever since the March 12, 2020 meltdown, the two best-performing currencies were BTC and USD. We are faced with clear economic turmoil so investors want to shed the riskier assets as they get ones that are less-volatile. This is a process known in the industry as “flight to quality”. In 2008, this happened as global demand for government bonds from the US led to negative interest rates. It is possible that the same thing happens right now with BTC.

On March 12, Bitcoin closed down at $4,970.79. On March 19, it managed to rebound up to $6,191.19, which is a 25% increase. At the same time, the USD has been constantly gaining on the main competitors, including Euro, AUD, CAD and GBP.

According to Google Trends, the coronavirus pandemic led to simultaneous spikes in searches for both the USD and BTC. A strong correlation exists between searches for “United States Dollar”, “Bitcoin” and “Coronavirus”.

As the population of the US started to fixate on this virus during early March, it quickly was followed by clear increased interest in the other 2 currencies. At the same time, the interest in “FX Rates” and “Euro” ended up being negatively correlated with the searches for “Coronavirus”. Due to this, the public sees 2 different currencies as being a hedge they can use against a probable and potential economic collapse.

Bitcoin is a very useful hedge against what is regarded to as being the old economy. Due to the fact that uncertainty appears about this old economy, more people now look for alternatives. There has to be an asset that becomes disconnected so funds are protected by what happens. In the past, the asset was gold. However, if the banking system is not solid, gold cannot be an asset class.

Philip Salter, Genesis Mining head of operations, believes the same thing. The sentiment was expressed in an interview for Cointelegraph, called:

“If this economic crisis is contained, then it will not have major implications for Bitcoin. However, if there is a real collapse, then the interest in Bitcoin will explode. It will go back to being seen as a hedge against the banking system. The more skepticism people will have in the old economy, the more they will flock to Bitcoin.”

Salter added that if an economic meltdown would happen, Bitcoin would quickly become the new gold, but in a digital form.

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