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How the Coronavirus has affected Crypto

 

April 27, 2021 (Investorideas.com Newswire) - For many major global markets, the pandemic has been one that has been severely impactful. The stock market was one that took a big hit and recorded it's fastest fall in history, whilst being as dramatic as the 1929 crash. Customer-faced industries like the hospitality and tourism sectors were also severely affected as countries implemented tough restrictions and lockdowns.

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Fast forward to over a year later and it finally looks as if some parts of the world have a better control over the virus, with many administering the COVID-19 vaccine. Hopefully, with the vaccine and mass vaccinations taking place across the world, life can return to normal.

But what state is the economy in when it comes to cryptocurrency? Here's how the coronavirus has affected Crypto.

Crypto before the pandemic

Cryptocurrency has slowly been creeping up in popularity as more investors found their trust in this new form of digital currency and in 2019, it had quite the profitable year.

According to Finextra, who thought that the end of Bitcoin had arrived with the Crypto winter of 2018, said that traders who had entered the market at the beginning of 2019 were enjoying a 200% ROI.

As more businesses and industries were warming up to the idea of accepting this type of currency as standard, it seemed that the only way was up for this digital currency. Many companies were being set up to trade cryptocurrency in order to help curb the many scams that were taking place.

Even though cryptocurrency was at the time and still is quite a volatile investment to invest your money in, that didn't put consumers off. But then the pandemic happened and things seemed to change initially.

How COVID-19 hit the cryptocurrency market

As per the stock market hit in March of 2020, cryptocurrency was also one that took the hit too. The price of bitcoin dropped to half the value, falling to around 3,780 USD.

Now this was something to be expected, especially being part of the financial market. However, what has happened since that initial drop is a rally that has turned it into a much stronger investment option than ever before and this might be due to our society shifting to a more digital lifestyle.

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With businesses operating remotely and many workers working from the comfort of their own home, it looks as if Bitcoin has benefited from those working from home. Many will have retained their jobs and with no real opportunity to spend money, many have saved it and turned their attention to investing.

Cryptocurrency has bounced back stronger

Finance Derivative has said that this digital currency has reached one of it's highest points of the year so far at 13,400 USD. It's turned into an asset that has become very attractive for both first-time investors and those who may have been hesitant before about investing in any form of digital currency.

It's bounce back from falling and then rising so exponentially has only proven that it's a financial asset that comes into its own when compared to other asset classes.

For many businesses, there's a need for a more digital infrastructure and one of those features within this structure is tech and remote financial services. Virtual currencies can step in for that where other more traditional forms - like the banks - are tripping over themselves to do.

As a result of it's increasing popularity, you may have seen many big names and businesses who've taken it upon themselves to invest their money into crypto. Just a few celebrities who own Bitcoin are Elon Musk, Mike Tyson,Maisie Williams and Kayne West to name but a few.

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If you're needing somewhere to start, you can buy USDT on MoonPay, as Tether is a stablecoin currently on the market. There are also plenty of platforms worth looking at when it comes to trading and saving cryptocurrency.

The benefits of investing in cryptocurrency

So what are the benefits of investing in cryptocurrency? There are many advantages, as well as disadvantages to cryptocurrency but that's to be expected with anything that you invest your money into.

Complex security systems

With the method of bitcoin's transactions in the digital world, it makes it difficult for hackers to penetrate. Every transaction that's made via bitcoins gets stored in a distributed public ledger. These are visible to all users and are maintained by miners who create new blockchains. This involves a fairly complex process that means a hacker requires over 51% of the total blockchain network.

As a result of this, it makes dealing with cryptocurrency, a very secure one due to it's incredible design.

No third party involvements

With bitcoin and cryptocurrencies in general, the work on peer-to-peer networks. This means that it's free from third party involvement and that cuts transaction fees as a result. It also, again, provides added security, which is an appeal for many who are cautious about investing online.

A way to diversify your investments

As an investor, whether you're a beginner or pro, you need to diversify your portfolio as much as possible. By doing so, you're going to help spread the level of risk and it can be helpful to have a mixture of investment pots to rely on.

Bitcoin is a popular investment due to the rising exchange rate and valuation that can come with it. They're a viable alternative to those that are more traditional investments like gold and property, for example.

Easy to use

Those who engage with transactions and investments of Bitcoin will likely find it very easy to operate and use on a regular basis. It's compatible with most devices that the majority of the population has and it's held in a bitcoin wallet. There's two sets of unique keys that are encrypted too so that it can be stored securely online.

As payment options become more tech-based, it's only natural that we're heading towards virtual currency as being the next step in how we manage and handle our money.

Exempt from inflation

With many other traditional forms of money, Bitcoin plays by a different tune when it comes to inflation. Due to it being limited, there's no issues when it comes to inflations and this can help combat the volatile nature of cryptocurrency on the market.

Bitcoin has plenty of investment opportunities and as it becomes more popular, it's good to be a part of it now, rather than waiting any longer. Virtual investments may end up becoming the most dominant when it comes to all types of investment types.

Regulation still proves to be difficult

Regulating cryptocurrency though is something that still remains a challenge, despite it having the above benefits. Even though some progress has been made to accept it more as a form of currency, there are still many places in the world that aren't as accepting or regulated when it comes to bitcoin.

The only exception to this is Singapore, which has a regulatory framework already in place for the buying, selling and holding of cryptocurrencies. Despite this though, cryptocurrencies continue to creep it's way into the mainstream and if our world continues to head towards a more digital future, then it's likely that this will become a regulated currency that's used globally.

If cryptocurrency was regulated in more countries, this might well affect the price of crypto. However, it's something that requires a lot of effort across multiple countries and several economies. Still even if this did come into fruition, the impact might be limited as it's difficult to collect taxes on it or better yet, be able to tackle any criminal activities involving it.

What's on the cards for cryptocurrency in the future?

Brad Garlinghouse who is the CEO of Ripple, a crypto exchange who's own digital coin XRP is the fourth largest cryptocurrency in the world, chimed in his thoughts about the future of cryptocurrency.

One prediction is that cross-border payments and taking on global partnerships with cryptocurrency is going to be crucial for it to be a more widely accepted currency. It means that countries will need to work together in order to regulate it correctly.

He also said that central banks should get involved in crypto and that's certainly something that many banks are looking to do moving forward. JPMorgan Chase is one that's doing much innovative work in blockchain technology. Goldman Sachs also offers altcoin products and has been doing so since 2018.

There are definitely a lot of exciting updates that can come from using cryptocurrency now and in the future. As more individuals and businesses find the financial incentive in it, the more valuable it'll become.

Invest in crypto this year

Despite it's rocky start at the beginning of the pandemic, cryptocurrency has passed the testing times of COVID-19 and is likely to thrive over the next few years. Now is the best time as any to begin your investment journey into crypto.

Remember that there will always be risks to investments. There are still plenty of cyber thefts happening and that cryptocurrency has been a target of. With the right knowledge and research done though, it can end up being a great way of making your money go further.

Author Bio: Natalie Redman

Email - natalieannredman92@gmail.com

Freelance writer for many clients including Skale, Natalie has two years of copywriting experience. Natalie has a wide range of experience copywriting for web pages for businesses across many industries. She’s also an owner of two blog websites and a Youtube content creator.

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