Lessons from the COVID-19 Selloff

The last time markets collapsed like this was on March 12, 2020. That was the day the world realized COVID was a big deal.

In case you forgot, let me remind you: it was chaos.

On March 12, the Dow Jones Industrial Average fell 2,353 points, its biggest one-day drop since 1987. Tech stocks and commodities fell sharply. We all thought the global economy was coming to an end. The next morning, the president declared a national emergency.

Of all assets, Bitcoin fell the most, dropping 37% from $7,911 to $4,971. It was a thrilling one-day move that wiped out a year's gains in 24 hours.

It felt like we might never recover. The media claimed that Bitcoin had failed as a hedge.

Then something remarkable happened. As world leaders took steps to stabilize their economies—cutting interest rates, printing money—Bitcoin began to rise. A year later, Bitcoin traded at $57,332, up more than 1,000%.

In retrospect, March 12, 2020 was not a day to panic. It was the best time to buy Bitcoin in a decade.

In hindsight, it’s easy to see why. Bitcoin didn’t fundamentally change because of the pandemic. The maximum number of Bitcoins (21 million) was the same on March 11 as it was on March 12. You didn’t need to rely on any bank, government, or company to store your wealth in Bitcoin on March 11, and the same was true on March 12.

At the same time, the pandemic also made more reasons for Bitcoin’s long-term rise. It showed that central banks would come to the rescue of economies at the first sign of trouble. It demonstrated the limitations of centralized institutions. And it reminded us that the future will be more online and digital.

These changes all suggest that Bitcoin will continue to become more important, not less important. And in the long run, it has.

I see the same scenario today. #内容挖矿