The year 2020 had an almost pleasant start until the COVID-19 broke loose, gripping the world economy. Just like its predecessors, the Black Plague and the Spanish flu that caused millions of deaths and brought the world to a standstill, the pandemic is projecting similar trends. However, unlike then, the technological advancement in this era enables people to work remotely, shop online, attend classes, transact online, and communicate with family miles away.
That is good news. However, the inevitable question that cryptocurrency investors are asking is, what is the impact of the pandemic on the digital coin? Cryptocurrency has long been named “a haven asset” because it operates in cyberspace. But is it? Given the fact that cryptocurrency was first created in 2008, the currency has never experienced a global economic crisis.
The Negative Impact
The virus started in China, the world’s largest bitcoin trader. The impact of the illness on the cryptocurrency market was anticipated when it hit Wuhan, long before the COVID-19 became a global pandemic. The lockdowns and quarantines have disrupted the mining farms’ workflow. Thus, the prices of the cryptocurrency mining equipment have suffered, making them ineffective. As the mining firms strive to strike a balance with the market dynamics, they have become even more critical. That also has a significant effect on the prices of cryptocurrency.
As the world watched in awe when the stock market prices dropped drastically, the cryptocurrency market also experienced an unprecedented crash. Statistics from CoinMarketCap indicate that the top-ranked crypto coins experienced over a 30% fall in market price. Bitcoin price, for example, fell by over 44% on March 13, hitting a low of $3,791.9 from $10,502 recorded the same date the previous month. Later the price rose to $ 5,000. It has been steadily picking up as it is currently at $7,324. The virus’ spread caused incredible panic, and most people rushed to sell, causing an unexpected influx that the trading system struggled to support. This lag was swiftly rectified, but it might influence the choice of traders in the future.
All Is Not Lost
Thanks to technology, the latest crypto coin news source indicates that digital coin might have an advantage over gold, which in the past, investors considered the most secure asset during a crisis. However, during pandemics, there are limitations in terms of transportation and logistics, both of which disrupt the gold business. In contrast, cryptocurrency is neither limited by borders nor lockdowns. In the comfort of your home, you can transact as usual.
Cryptocurrency is immune to manipulation as an individual does not control it. You can store, transfer, and transact without being subjected to the limitations of the international financial institutions or your country’s central bank.
The primary avenue of the virus spread is through contact. As the governments are advocating for electronic transactions, there has been a massive shift to FinTech and cryptocurrency to minimize hard cash transactions. Europe alone has registered a 72% increase in electronic cash transactions. What many people perceived as a convenient method of payment has quickly shifted to be the mainstream transaction method. The trend is predicted to rise as most businesses are accepting electronic payments only. Because of its safety during this time and convenience, most people are embracing FinTech apps. Chances are the habit that will stick long after the pandemic is gone.
Governments are coming up with fiscal policies that better respond to the current situation. The Indian Supreme Court, for instance, has declined to approve the ban that barred financial institutes from providing cryptocurrency companies with financial services. Industries that traditionally used physical currency are also exploring blockchain. Further adoption of cryptocurrency by the masses seems promising now more than ever.
There Is hope
In this uncertain time, tracking the prices, charts, and analysis using auto-software is the practical step to stay informed on crypto trading. The anticipated halving of bitcoin has been seen as an equalizer for the turmoil the bitcoin market is undergoing. Investors are hoping for a return on investment. Could be cryptocurrency is “beyond safe,” as some crypto experts claim.
Though there is limited information on what exactly to expect if the pandemic continues, one thing is for sure, and cryptocurrency is evolving every day to meet the market demand. The digital coins have barely touched the surface of its full potential in terms of growth and prices. Don’t let the uncertainty of this period hold you captive. The future has unlimited possibilities.