The coronavirus pandemic took everyone by surprise; it was impossible to be prepared for such a course of events and a variety of repercussions.
First and foremost, the virus still remains a threat to everyone’s health and lives, but this is only the beginning of a long list of effects. The lockdown and the following restrictions have already severely impacted multiple industries, and it still doesn’t seem like the end of worries. Some are doing better than others, but there probably aren’t any businesses that haven’t been impacted by the pandemic to some extent.
So what about Bitcoin? The coronavirus impact on the global economy is already significant, and experts predict that it can actually get worse. Do people still have time for cryptocurrencies? Are they willing to take risks to buy, sell, and exchange? Do they want to sacrifice their resources for mining?
The Positive Impact of COVID-19 on Bitcoin
It may seem out of place to talk about any positives in relation to the coronavirus pandemic when so many people have died or lost the means to live since the outbreak. However, there are always two sides of the same coin. Of course, the situation is dangerous and uncertain, but it’s enough to mention its impact on the environment to see that the world is never black and white.
Numerous people are exploring the Bitcoin world while social distancing.
A lot of people got stuck and home, many of them can’t even work, so they look for other ways to stay occupied, and for some, one of these ways is Bitcoin. They explore trading secrets, get to know the details of the mining, and seek ways to spend their hard-earned coins – and there are multiple ways to do it, many of them creative or quite original. There are slots and online casinos based entirely on blockchain technology and bitcoin (e.g., www.MyBitcoinSlots.com or Bitcasino); you can bet on your favorite sports, buy games and various other goods, pay for services, and even try to make money.
Even those that aren’t stuck at home are looking for means to adapt to this new reality. In many parts of the world, it was or still is impossible to, for example, visit a bank, and people needed to start making decisions online. Many industries have begun to change to enable their customers online activity. And considering the uncertain situations and the liquidity crisis that has already started, more and more people decide to try less conventional financial solutions, including cryptocurrencies. Even institutional money is being invested in crypto right now. What’s more, central banks revived their talks about creating their own blockchain-based currency.
The Negative Impact of COVID-19 on Bitcoin
At the very beginning of the coronavirus pandemic, Bitcoin was hit just like everything else. All asset classes were affected, even normally stable gold, and cryptocurrencies were not an exception. Bitcoin is not dependent on other assets, but it relies on liquidity. And people (since forever) tend to monetize their assets whenever something wrong occurs. So it’s no wonder that they started panic-selling when the virus broke out. This was when the price of a coin crashed to $4,000.
However, the initial crisis didn’t make people as much reluctant to cryptocurrencies as to central banks. They have also had time to get a bit used to the new situation, which is still uncertain, but they realized they need to adapt. And the price per bitcoin rose again – this time up to $10,000.
And Bitcoin is code-based, technical, therefore, adaptable, and it works better when it comes to the supply-demand relation, contrary to central banks and money.
What about the Future?
No one can say what will happen even in the nearest future. It’s only possible to make predictions about the state of the global economy, and it is still guessing, especially that nobody can tell if there will be a second wave of coronavirus, and how serious it will be, or when we will have an effective cure or a vaccine.
But, if there isn’t any other unexpected disaster, Bitcoin should be relatively fine. For example, there’s been a rise in Bitcoin users in the parts of the world where currencies are now experiencing high inflation, mostly in Latin America and Africa, despite some of these countries being severely affected by the virus. The interest is on the rise, and most probably, it will continue to be.
According to new research conducted by The Tokenist, general awareness is rising. More and more people look for information about Bitcoin, also among those demographic groups that used to be less interested. And along with knowledge, confidence and trust are growing strong. Almost half of all millennials are more likely to invest in Bitcoin than stocks, real estate, or gold, and 47% of all respondents think that Bitcoin is now more trustworthy than most banks.
Another indicator is a sudden rise in the value of Dogecoin, especially among very young people (young adults and even teenagers). Dogecoin is a cryptocurrency which value increases along with is virality. So, even though it is not directly connected to Bitcoin, it may suggest that more and more people get interested in cryptocurrencies.
Because of its independence and the decentralized system it is built on, Bitcoin is now seen as a relatively safe way to invest money. It’s easy to access, and there are no minimum investments. It has become mainstream, and it seems like it may be doing better than ever.
The Bottom Line
Of course, Bitcoin was impacted by the COVID-19 pandemic. Most probably, there aren’t any people, industries, or countries that haven’t been hit by the coronavirus, though the results aren’t always the same. Bitcoin suffered hard at the moment of the outbreak, but since then, its situation has been continually improving, making it right now the best-performing asset of 2024. According to The Tokenist, 43% of their respondents think that most of us will hold some bitcoins within the next decade. And maybe they are right.