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Coronavirus Impact on Bitcoin and its future

The spread of the COVID-19 virus has led to economic collapse around the world. Many people lost their jobs and many companies were forced to close because they were not economically strong enough to survive. And while some say that it is a well-thought-out conspiracy of politically powerful people, on the other hand, we hear about the enormous number of infected and dead people every day. What we can say with certainty is that this virus has left a big mark in every country and that it will take a long time for everything to return to the way it was before March 2020.

Although many equate investing in cryptocurrencies with investing in gold, the difference still exists. Experts say that investing in gold is much safer at the moment. Shortly after the pandemic was declared and the value of gold and cryptocurrencies fell, gold recovered and has the highest value so far, while “digital gold” still has a 30% lower value than it was until February 2020.

The corona has had a major impact on the economy at the global level and it will take many years for some to get back on their feet and return to the level they were at before the virus appeared. The first cases of coronavirus infection appeared at the end of 2019 in China, and shortly afterward in Thailand. People reported symptoms of pneumonia, and after it was confirmed that this virus was the cause, the cryptocurrency market began to decline, and between February and March, the value dropped by about 40%.

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Until then, the total market value of digital currencies was 308 billion dollars, and from mid-February to mid-March, it dropped to 118 billion dollars. That’s the period when bitcoin dropped from $ 10,400 to $ 4,120. Compared to other cryptocurrencies such as Ethereum and Ripple, Bitcoin has recorded a smaller decline. Namely, the value of these currencies fell by 66%.

Messari co-founder, Dan McArdle claims that the bitcoin is a kind of protection from inflation and loss of confidence in so-called fiat currencies such as the pound, euro, and dollar.

Although bitcoin has characteristics of a safe haven, it has not behaved that way for many reasons:

Adoption

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While the gold is in ownership of central banks, MMF, and businessmen and companies all over the world, there is no evidence bitcoin is owned by any major institution more than1%.

Trust

The difference between gold and bitcoin is that the bitcoin is held by not that many people, which leads to the risk of volatility.

Cash before bitcoin

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Many financially unstable people, in the absence of work and basic means of subsistence, have decided to replace their cryptocurrencies with something more “tangible” – cash, which they need for basic foodstuffs.

However, there are a lot of people who try to get the best out of them. There are still many who think that investing in cryptocurrencies, especially bitcoin, will never be a wrong step. Moreover, they see the decline in value as if they are investing right now, predicting that the situation will stabilize very quickly and return to the old way. However, one should take into account the fact that its value is growing day by day.

From its inception, cryptocurrency has become synonymous with cash and credit cards. What makes it much easier to use is the fact that the fees are low. For every transaction you make with your credit card, the bank charges a fee, and if you tend to “swipe” your card frequently, you’ll be surprised at the end of the month to see a solid amount deducted from your account just for the commission. With bitcoin, the commission is kept to a minimum, and additional costs can only occur if you require someone to maintain your account. One more positive thing is you can use it to pay bills, flight tickets, a hotel room, a family holiday, and many other things you can do with classic money. More positive things for investing you can read on europeanbusinessreview.com.

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With bitcoin, there is no fear of inflation. Inflation usually occurs when the government decides to spend more money, reducing the purchasing power of the people in that way. The Bitcoin system was created to be final (21 million) and therefore there is no danger of inflation. This information is of great importance to both the seller and the buyer.

One more advantage of using cryptocurrencies is there is no third party. By this, we mean the entire transaction process is a peer to peer. It s impossible for someone to steal or take away the coins from you, not even Government.

We can say that this pandemic also brought something good. More and more money is invested in digital education, teleworking, as well as sustainability. Consumers have adapted well to the “new normal”, and investment and financial advisers have also realized that business can run smoothly online.

Also, many believe that the current situation caused by the spread of coronavirus is slowly calming down, especially in China and other Asian countries, which hold 70% of this market. With this, the value of bitcoin is expected to continue to grow steadily.

Conclusion

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From the text written above, we can conclude that bitcoin has shown great resilience to market disruptions recorded in previous months. After a drop in value was recorded, there was an increase in an incredible 170%. This once again confirms the fact that the cryptocurrency market can be shaken, but not destroyed. Bitcoin is the most popular and valuable currency and its popularity will only grow, but sometimes it takes slow steps. The best advice you can get is not to give up investing but to arm yourself with patience and closely monitor the market situation. For those who do not like to spend a lot of time at the computer, but like to invest, we recommend buying software that will do all the work for you thanks to your intelligence. This way you will be sure that the only step you will take is a step towards earning.

About Matt Durham

Matt Durham

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