Governments around the world are careening toward a period of dramatic spending.

The U.S. Federal Reserve announced another $2.3 trillion in lending programs on Thursday to stabilize America’s coronavirus-stricken economy. The Bank of England announced it would likely extend billions of pounds to directly finance the government’s crisis response.

All this inspires inflation concerns around the globe, which appear to be driving demand for bitcoin (BTC) in some corners.

“The non-stop quantitative easing process will finally impact the mid-term and long-term market,” said Danny Deng, a leading member of both the China Blockchain Application Center and the National Internet Finance Association of China. “Bitcoin is designed for this kind of situation. So I’m optimistic about bitcoin’s future.”

China is also expected to announce a stimulus package of its own. Deng said he expects the People’s Bank of China to use a digital currency to distribute a stimulus package, which he sees as a complementary catalyst to the bitcoin mining industry.

While central banks continue printing money, there will only ever be 21 million bitcoin. The halving of bitcoin miners’ block rewards is scheduled for May in what some are calling an act of quantitative tightening.

Broadly speaking, dozens of nations are reevaluating which currencies and industries they depend on. Bitcoin fits into this broader spectrum as some nations with strong central governments, like China, shore up hard assets and digital infrastructure. Meanwhile, there has been a surge in retail crypto investors from nations with unstable currencies, such as Argentina and Russia.

“We see that interest in cryptocurrencies has grown significantly in Russia … due to the economic situation in the country,” said Gleb Kostarev, Binance’s head of operations in Russia. “The ruble has tumbled a lot in 2020. In addition, authorities are introducing a new tax on income from bank deposits from next year, which encourages people to withdraw funds from banks.”

Bitcoin is hardly the most important asset in the broader economic turndown. However, recent bitcoin trends highlight the local impact of global developments. In places where distrust of banks historically runs high, many households now consider bitcoin among the assets they trust more than the local fiat currency.

Speculator's market

Some critics may see decline in bitcoin’s wild volatility during the start of the coronavirus economic crisis, including what crypto traders called Black Thursday.

But the institutional sell-off and subsequent trading rush stimulated more diverse distribution, usage and liquidity options, all while making crypto companies a hefty profit.

Marius Reitz, general manager at the African crypto exchange Luno, said there was a 25 percent increase in new signups during Q1 2020 compared to Q4 2019. This includes “thousands” of new users from Nigeria, South Africa, Zambia and Uganda. He added there was a 100 percent increase in trading across the continent.

“People saw an opportunity to recover some of their earlier [traditional market] losses in bitcoin,” Reitz said. “It’s very much still a speculator’s market.”

Reitz said March witnessed a stronger correlation between gold and bitcoin trades in African markets as well. Overall, it appears bitcoin distribution diversified during the coronavirus downturn.

According to the asset manager and research firm Bitwise, nearly all exchanges experienced an increase in volume during March. North American exchanges including Coinbase, Kraken and Gemini saw the most growth in trading volumes. Kraken’s bitcoin strategist, Pierre Rochard, said the exchange saw a 300 percent increase in new users getting verified in March, compared to the previous month.

“These are new users who didn’t have any crypto beforehand,” Rochard said.

Fiat-denominated prices aren’t the only way to measure bitcoin’s performance. The number of active bitcoin wallet addresses is now comparable to metrics during the sky-high prices of September 2017, according to Coin Metrics, which estimated roughly 770,915 active accounts on March 30, 2020 compared to 718,184 on Sept. 29, 2017.

Although the price of bitcoin briefly dropped 40 percent, down from $9,160 in early March, it recovered to roughly $7,300 as of press time. As such, Luno’s Reitz said bitcoin suffered less of an impact, and recovered faster, than many other asset classes.

Institutions that sold off in early March quickly bought back in, according to Diogo Monica, co-founder of crypto custody firm Anchorage. Plus, BitGo CEO Mike Belshe said his custody startup saw such high demand for bullish loans in March that he will double the size of the team handling crypto loans. Exchanges and custodians are actually making more profit during the recession.

When the market crashed, speculative crypto trading and demand for custody options soared. Ledger CEO Pascal Gauthier said hardware wallet sales saw “double-digit growth” in Q1 2020 compared to the same time last year, with sales still accelerating.

“We are increasing our hardware [wallet] production as a result,” Gauthier added.

As speculative traders rush in, Latin Americans increasingly turn to bitcoin for savings and loans.

Latin America

“The main usage is to save. … People are seeking safety,” said Ripio CEO Sebastian Serrano, whose Latin American company offers both crypto loans and an exchange. “Argentina was on the brink of default and that happened on Sunday.”

Argentina isn’t the only country to default, either. Lebanon, Ecuador and Venezuela are also on the brink. Bitcoiners in Lebanon often focus on savings because they, like Latin Americans, share a distrust in banks.

Cryptobuyer CEO Jorge Luis Farias said orders for crypto point-of-sale (POS) devices doubled in March, mostly in Venezuela. He’s also shipping three new bitcoin ATMs to Chile, where the local currency hit a historic low in March.

Subsequently, by the first week of April, Chilean activity on LocalBitcoins reached an all-time high of $371,063.

“More people are looking for options to receive payments,” Farias said on April 7. “We received 100 new [POS device] requests only last week.”

According to fellow Venezuelan expatriate Mauricio Di Bartolomeo, co-founder of the crypto loan startup Ledn, Mexican and Argentinian users are driving growth on his platform with bitcoin savings accounts. Even including bitcoin-collateralized loans for dollars or stablecoins, Latin Americans now make up 60 percent of new Ledn user accounts in 2020, he said, compared to around 16 percent from North America. His user base, with “thousands” of people, doubled over the last six months.

“I think the economic situation has to do with it, in Argentina and Mexico. Mexico had a run-up in exchange-rate disparity,” Bartolomeo said. “We expect to see a lot of demand from Latin America to save in options that aren’t their local currency.”

If the rate of bitcoin savings and reliable loans remain steady throughout the broader economic crisis, that may arguably be a more bullish signal than fiat-denominated price increases.

Asian alliance

Meanwhile, several Asian nations are reacting to the recession by increasing their economic interdependence.

The Shanghai Cooperation Organization with China, Russia, Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan agreed in March to work with local currencies, instead of U.S. dollars, when conducting bilateral trade and issuing bonds. Deng said the Chinese government aims to make its currency regional tender, “then a global currency” like dollars.

“China’s national digital currency will accelerate this process,” he added.

The crypto industry could provide the infrastructure for this distribution. Kazakhstani entrepreneur Tilektes Adambekov said in April he is still working to launch a regional crypto exchange that will eventually include “fiat trading and security tokens,” although these aren’t plans specifically focused on China’s digital currency.

“This region will accommodate global initiatives under the ‘Belt and Road’ global development strategy,” Adambekov said during a meeting with Chinese business associates in January.

As for bitcoin itself, traders from the above-mentioned markets sometimes liquidate their crypto by investing in real estate, especially now that oil and bond markets are highly volatile.

Middle East

Gold, oil and real estate investments appear to increase, along with bitcoin transactions, when stocks and bonds dip.

Arms & McGregor International Realty CEO Makram Hani said his company is working to close a Dubai property purchase, worth $140 million, using multiple cryptocurrencies from a single Asian buyer.

Out of the hundreds of prospective customers who expressed interest in potentially buying real estate with cryptocurrency, Hani said the most popular property locations are Dubai, London and Berlin. It appears bitcoiners in nations with increased surveillance may be seeking a liquidity hedge with traditional assets, while others in the Middle East are willing to accept large amounts of cryptocurrency.

“We have seen a significant growth in real estate transactions that have been paid for, in one way or another, with funds originating as bitcoin or other currencies,” Hani said.

Rain co-founder Yehia Badawy, who also serves bitcoiners in Dubai via his Bahrain-based exchange, said trading volumes increased 200 percent from January to March 2020, with 34 percent more new user signups driven by “high-volume retail.”

“People are still trying to figure out how permanent the [economic] changes will be,” Badawy said.

Due to the oil market slump, Bahrain, Saudi Arabia and Qatar have struggled to retain investor confidence in their debts. The oil market collapse could have more dire impacts on weaker states like Lebanon and Iraq, which were already saddled with crippling foreign debts before the pandemic hit.

Mikhail Kholodov, an oil market expert at MOL-Russ LLC, described the global market these days as “all speculation” and “hot money in a casino-like arrangement” that won’t regain balance “anytime soon.”

When spooked investors diversify, some now rank bitcoin alongside tangible investments like gold or real estate.