Last Updated on 3 weeks by Ameer Hamza
The epidemic has affected all financial products, including the stock market, commodities market, and cryptocurrency sector. COVID-19 has caused significant economic disruption. The latest bitcoin market fall should be viewed as merely a price correction. Bitcoin is a financial asset and should be considered an investment vehicle with long-term growth prospects. Price fluctuations are a natural feature of every asset class, and bitcoin is no exception.
If you look at the year-over-year increase in Bitcoin values, you will notice a consistent rise. As a result, recent statements from industry titans have led to some pricing adjustments, although they are not permanent.
The previous year was a watershed moment for cryptocurrencies and blockchain. Cryptocurrencies have proved to be quite durable in the face of adverse and global economic meltdowns. Fortunately, the fast expansion of worldwide high-speed internet access and digitalization has provided an ideal environment for digital money.
Coronavirus, also known as COVID-19, has wreaked devastation throughout human history. It’s nothing short of a calamity that we’re going through. Sustaining appears to be the only way to get ahead at this point.
While the pandemic reduced the value of various commodities and assets, the crypto marketplace, on the other end, was discovered to be immune to coronavirus.
It is completely wrong to attribute the expansion of the crypto market to this worldwide illness. It is critical to examine the facts and data and to scrutinise every detail.
So, let’s have a look at how COVID-19 has affected the whole Crypto Market.
- Prices have dropped by half by March 2020, reaching as little as $3,780. Ever since then, Bitcoin has amassed enormous value and fame as a result of the epidemic.
- Sentiment has been far too positive, pumping Bitcoins and altcoins to new highs, breaking multiple previous milestones. As of 2021, Bitcoin’s market valuation is $1.1 trillion, accounting for about half of the virtual currency sector’s total value of more than $2 trillion.
- Whereas other assets were losing value, cryptocurrency was proving to be a dependable asset in these difficult times.
- Despite this lethal pandemic, virtual currencies in many nations continued to grow their operations and their numbers. This also resulted in the establishment of new Bitcoin exchanges in certain nations.
But this industry is like a double-edged sword. If the value and market have increased, there must be other factors that have decreased as a result of the coronavirus.
- Indeed, equities have risen since the outbreak. However, other analysts predict that this dramatic increase will not endure indefinitely. Bitcoins are not a safe refuge like gold or silver.
- In a lot of countries, cryptocurrency is still uncontrolled and unpredictable. As a result of this threat hanging over the crypto market’s head, emotions are deteriorating.
- Bitcoins are still not widely recognised in many countries. Yes, it is still widespread, but this surprise epidemic has turned some people off from investing in cryptocurrency.
- The market is serving as a safe haven and a trustworthy investment, which is a plus for cryptocurrencies.
As a consequence of the pandemic, consumers are more motivated than ever to use digital payment methods. As a result of this shift in payment habits, many central banks around the world are in the process of establishing as well as launching Central Bank Digital Currencies (CDBCs) as the alternative payment mechanism in the digital economy.
The CBDC attempts to combine the best of both worlds: the safe digital payment mechanism of cryptocurrencies and the old system’s controlled and regulated money circulation.
Currently, the market is in its infancy. Because of the epidemic, the worth and consideration had increased. However, because of the existence of scams and liquidation concerns, it may lose its value at any point.
The outcome is yet unknown. If it becomes legal, it has the potential to reach and exceed all-time highs, but if the regulations are changed, it has the potential to have a negative impact on the entire globe.