COVID-19 has taken over the world, as a pandemic, as a health disaster as well as an economic disaster. People are dying and so are businesses. Markets are crashing world-wide and traditional investment havens like Gold and Silver have been gaining quite a momentum.
But, what after Gold or silver? ‘Cryptocurrency’, is a powerful technology solution developed for global investors to cast out inter-governmental and cross-country issues; and other investment obstacles. Cryptocurrency is no hard cash or any sort of physical money. It is basically data code bunches hidden in computers that can be used for transactions further, with or without cash. They generally require third party exchange’s like Coinbase, Kraken, etc. to cash out.
Bitcoin
As of now there are more than 100 digital money or cryptocurrency options available to investors globally, together called the ‘altcoins’. But, the most famous as well as the one with maximum capital share is still ‘Bitcoin’.
One of the biggest reasons for the success of bitcoin is its safety protocol that engages ‘blockchain’ technology. Bitcoin is basically a set of codes that is synchronized to run on various computers (47000 nodes as of May, 2020 and growing) together. So, all of them cannot be hacked or manipulated to alter data inputs together. The changes are quickly detected and acted upon. As a result, using cryptocurrency like blockchain for transactions, has made bitcoin the next safe haven for investor money.
The year 2017 saw its price grow and reach upto $20,0000. Though, the currency is currently trending at close to $10000 mark.
Analyzing The Covid Impact
Let us now analyze the way Covid-19 has affected the cryptocurrency market as a whole and their specific relations with the cryptocurrency market as well.
The Market Trend: The world had witnessed a global economic meltdown of sorts in the coronavirus era. With market sentiment running low and people looking out for liquidity and cash flows; there cryptocurrency market witnesses a sharp decline too. Bitcoin tanked to as low as US$4000. The market brunt was greater for other crypto currencies. Though, the cryptocurrency market is known to have zero market effects; the overall investor sentiment had gone low with people cashing out assets for regular sustenance. However, as the investor sentiment began to normalize, the currency again showed positivity and traded between the US$7000 to US$8000 mark in the month of April,2020.
The Supreme Court has lifted ban on cryptocurrency in India: This has by far been one of the most positive news for the cryptocurrency markets across the globe. With the Supreme Court of India ruling in March, 2020 that,’ curbs on cryptocurrency trading is illegal’, one of the largest obstacles for cryptocurrency miners and traders has been bypassed. Cryptocurrency industry now seems to be ready to well utilize this new legalized demeanor and the markets are sure to witness greater liquidity and higher trends. Many new cryptocurrency trading platforms and investment opportunities are sure to mushroom with the opening of this trade route in this country with more than 2 billion people..
The concept is still fresh: It needs to be understood that cryptocurrency is comparatively a novel concept. Its value is nowhere on the lines of traditional investor commodities like gold and silver. The number of investors believing in the concepts are rising, but they are still nowhere close to let cryptocurrency be called the new investor option. The onset of coronavirus over and above these limitations came as a blow. For the trade veterans, who believe in the concept of digital gold, feel that, ‘Cryptocurrency is like shares’. If an investor is looking for huge profit margins, cryptocurrency exchange is definitely the place to be. Trade exchanges like Coinbase, WazirX, etc. enable investors to form bitcoin wallets and store bitcoins in them for trading as per the crypto market fluctuations and requirements; positive or negative. For investors who love high risks and crave for highest profits; this is undoubtedly the most ominous investment option as on date too.
The environmental negatives are limiting the cryptocurrency growth: Apart from the user sentiment and the need to literate the users about the utility of the currency, there are other negative traits that seem to hurt the investor hard these days. With a commission of 1% per transaction, the concept may feel good to the transaction platform; but definitely not for the investor who is required to shell out the money. Apart from that, dealing in digital Gold; in times of millions of digital hackers all across also does not seem to be a very positive aspect to the investors. Reports prove that more than 19% investors trading in cryptocurrency have also been hit by hacking attacks at the cryptocurrency exchange itself and 10% have encountered frauds therein. These aspects have also been pulling back investors from further investing, especially in these covid times when every step is being taken for assurances and not much of risk.
Mining is now a cumbersome task: Earlier, several computer geeks tried to find Bitcoins through sheer processor power and knowledge of computer nodes. This is called mining of ‘bitcoins’. Finding one meant earning thousands of dollars from nothing. It is not just the coronavirus, but the overall rise in energy costs and as the circulation of bitcoins now seems to gradually decrease; finding them is becoming cumbersome and costly by the day. Thus, there is a steady drift of investors towards bitcoin trading which might make it a more viable investment option in the coming times.
Immunity from Inflation: A very positive aspect of Cryptocurrency is that it is immune to economic and governmental inflations as well as trade market fluctuations. These have been some of the major investor concerns during the Covid times. Since the crypto currency does not belong to any particular country or society; it stays unaffected by economic meltdowns or inflation or other calamities faced by countries. In these challenging COVID times for businesses, Crypto currency has thus risen in stature in terms of a safer option for parking of and easy liquidation of funds for investors globally in these covid times. The market value of many of them including bitcoin has witnessed a considerable positive market trend, giving way to speculations that this might be the next digital ‘gold’ or ‘silver’ for investors.
Conclusion
Until a few years back, the concept of a new uniform digital currency for the world investor seemed like an insane mind’s hallucination. But, the launch and tremendous growth of Bitcoin, Etherium, and likewise altcoins shows that the world is ready to invest in alternate options.Some of the market factors have worked in favor and some against cryptocurrency in these challenging times. All-in-all the markets are currently witnessing a surge after a steep fall and following market consolidations. Cryptocurrency is here to stay and with the positive outlook of investors, is touted to grow and prosper in the post COVID era as well.
Sign in to leave a comment.