COVID-19 has impacted every sector globally, be it health, economy, education, or tourism. Cryptocurrency is no exception, but the impact is far from negative.
After the COVID-19 crisis, cryptocurrencies have been gaining massive popularity. In the beginning, in March 2023, things were slightly different. When the lockdown was announced across the world, the crypto market crashed. The primary reason behind this was that investors started pulling back their money from the market.
Fast forward to today. People are investing in cryptocurrencies like never before. Beginners to advanced investors are pumped to win at the crypto game.
So, what do you think has transformed in the past year? Why has the World of Cryptocurrencies gained momentum post-COVID-19? Read on to find out the answer.
Switching from Gold to Cryptocurrency Investing
Since ancient times, gold has been marked as the safest investment. Despite fluctuations in the prices of gold, it has never dropped to zero. However, gold is a metal, so its prices depend on factors like transportation costs and supply issues. During the global pandemic, this issue led to disappointment in investors.
That’s where cryptocurrencies step in. Cryptocurrencies are digital currencies. State borders do not bind them, nor do they face transportation or logistic issues. You can quickly transfer cryptocurrencies using blockchain. It is untaxed and decentralized.
Besides, no third-party bank or person is involved while dealing with crypto. That’s why crypto investment boomed during the pandemic. People started learning more about blockchain technology and investing in cryptocurrencies.
Changes in Cryptocurrency Regulations
Before the pandemic, most countries didn’t approve of digital currency usage. People also believed that crypto investment wasn’t worth it since the market was pretty volatile.
Currently, governments and companies of a few countries have accepted cryptocurrencies into their economy. Most have started encouraging the use of digital money. Some countries are yet to develop laws regarding crypto investments and their regular usage.
For instance, the Philippines has approved around sixteen cryptocurrency exchanges. Costa Rica has declared that paying employees in cryptocurrencies is legal.
Similarly, if more and more countries approve cryptocurrency usage, the crypto market will take new turns in the next few years.
Cryptocurrencies are Revolutionizing the Financial System
Cryptocurrencies didn’t exist two decades ago. Still, various companies are now creating their businesses based on cryptocurrencies. People are searching for new investment opportunities, and banks are also approving cryptocurrency usage.
Even the less privileged can invest in crypto and generate a good earning. (You must have heard of many crypto investors that became millionaires through crypto investing.) Besides, several apps have been developed to trade in crypto.
Cryptocurrencies are also being introduced in the rural parts of the world. As a result, crypto is becoming the modern and inclusive investment market.
Other Impacts of COVID-19 on the Cryptocurrency Market
Several changes have been noticed in the crypto market since lockdown was imposed. During the early days, the crypto market crashed, and soon after that, it reached new heights. So, let’s talk about the positive and negative impacts COVID-19 left on the crypto market.
- Although the prices of cryptocurrencies were highly volatile, most investors chose to invest in cryptocurrencies. This led to a surge in the crypto market despite the pandemic. Eventually, the cryptocurrency world attracted people from all over the globe, and crypto became one of the newest yet most famous investment platforms.
- Bitcoin, the most popular cryptocurrency, dropped down to $3,780 near March 2023 end. However, by May 2023, Bitcoin reached an all-time high and gained immense popularity. Most investors claim that investing in Bitcoin is highly profitable.
- Traditional commodities like gold, silver, etc., have lost their worth during the pandemic. At the same time, cryptocurrencies are still in demand and have proved to be a reliable asset.
- New cryptocurrency exchanges are developing, and people are trying to secure their future by investing in cryptocurrencies through cryptocurrency exchanges.
- Blockchain offers frictionless exchanges and anonymity, so anyone can purchase cryptocurrencies and earn profit from them.
- Like other sectors, cryptocurrencies have been affected negatively in some aspects:
- Some finance experts and investors still claim that crypto investment is not as safe as gold or other commodities. They say the rise in the crypto world won’t last long. However, the answer to this will only be known in the coming years.
- Countries don’t have regulations for crypto. So, it reduces the potential to invest in cryptocurrencies. People are still not sure whether investing in cryptocurrencies like Bitcoin, Etherum, Ripple, etc., is legal or not.
- Sophisticated investors are likely to regulate the prices of cryptocurrencies using the pump-and-dump scheme. As a result, other investors would have to bear losses by dropping down their holdings.
- Unless all countries (or most countries) legalize cryptocurrency usage, crashes in the cryptocurrency market are evident.
How far will the Cryptocurrency Market go?
The uncertainty of cryptocurrency prices is mostly due to the financial regulators in the US. However, cryptocurrency is in its early stages, so nothing can be said surely enough. Also, it is alleged that miners will bag high profits from cryptocurrencies in the coming years. Here are a few expectations for the cryptocurrency market.
- It is predicted that the most popular cryptocurrency, Bitcoin, will hit the $500,000 mark by 2030.
- There will be various types of Bitcoins launched in the market in the coming years.
- Cryptocurrencies are untaxed, safe, reliable, and decentralized so that more people can switch to digital money.
- Many companies are planning to launch their cryptocurrencies. They will also accept payments in cryptocurrencies, so the crypto world will grow.
- If more users adopt cryptocurrencies, the day is not so far when cards will disappear from our wallets.
The Bottom Line
We have come a long way from paying for goods using cash to online transactions and now digital money. Specifically, after COVID-19, the use of technology has increased. So it’s not surprising to see that the world of cryptocurrencies is transforming rapidly.
The future of cryptocurrencies is still questionable, albeit filled with hope. If you are willing to try your luck, you should not ignore crypto investment. To know all about cryptocurrencies, visit this site.