The analytical division of the BitMEX crypto exchange published a report outlining the current economic situation in the world and the impact of the coronavirus pandemic on the economy. Falling stock markets may attract new users to the crypto world.

The new BitMEX Research report examines the impact of the coronavirus pandemic on the US economy and the adequacy of measures taken by central banks and governments to alleviate the current crisis. According to analysts of BitMEX Research, the spread of the coronavirus Covid-19 triggered the current financial crisis, which can be called one of the worst stock market crashes in history, similar to the financial crisis of 2008 and the collapse of the dotcoms in 2000.

The S&P 500 index fell by more than 30% since the beginning of 2020, while the Dow Jones Index showed the highest daily decline since 1987. Responding to the market crash, the US Federal Reserve lowered interest rates to 0% and announced plans to buy back $500 billion in treasury securities and $200 billion in mortgage-backed securities.

But BitMEX analysts believe that central banks no longer have room for maneuver because lowering interest rates below zero will result in the situation when people accumulate funds rather than increase their expenses, which is necessary to stimulate the economy.

"It is no longer unfashionable to say that central banks have reached the limit of what they can do."

This can lead to an era of extreme inflation, which resembles the 70s of the last century when inflation reached 15%.

This is a time of great opportunities for such a deflationary currency as Bitcoin, and, at the same time, the most severe test for it, supposes BitMEX Research.

Despite a 53% drop in price from the peak of 2020, bitcoin's deflationary nature could attract new users to the crypto world as the government-supported fiat currencies face significantly higher inflation than many cryptocurrencies.

“In our view, in this changed economic regime, where the economy and financial markets are set loose, with no significant anchor at all, not even inflation targeting, it could be the biggest opportunity Bitcoin has seen, in its short lifetime.”