SARS-COVID-19, as a global epidemic, has had an effect on all industries; we can see that due to it, many have suffered, and there was a significant decrease in the profit in almost all fields. When it comes to the crypto industry, we have witnessed that some natural disasters have affected it positively and others negatively. So, what was the effect of this pandemic on the values of the most popular coins, stay tuned to find out.
Was the market prepared?
No one has seen this pandemic to go this far, and that the whole world would be affected by it. What is interesting is that as the pandemic spread, different parts of the world were affected, and this has allowed other countries to learn from their mistakes and cover their losses in order to survive and stay on top of the job as best as possible.
Since the world was not prepared, and many countries, especially the big ones that are holding the world economy, such as China, the United States, and Russia started to crack under pressure, many businesses have been walloped, and there are threats for the survival of some.
The crypto industry is connected to the internet and not physical offices, so when social distancing and closing of businesses came to the action, there were no effects on in, in that sense. However, can we say that the market was prepared? Both yes and no. In general, no one was prepared, but it should be a sign to prepare when China declared the new virus, and the CDC confirmed that there was pandemic in action. We can say that this market had time to get prepared, and we will see in the future how this held up.
How was trading affected?
One of the biggest traders on the crypto market is, for sure, the United States. We already know that they have failed completely to stop the virus and were very nonchalant when it comes to the threat, not taking it seriously. This has overflown on the economy of the whole country, leaving it deeply handicapped in the months to come.
As stated, the most trading of cryptocurrencies has occurred on the soil of the United States, and in this sense, there was a decrease in the frequency and amounts that were traded. But if we look at the bigger picture, we can see that other countries have managed to level this up since they have increased the trading.
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Effects on the mining
As the United States are the ones where most trading occurs, China and South Korea are the ones that are holding the biggest part of the mining in the world. This means that once affected, and there was an expected decrease in the mining on this part of the planet. The mining is tough work, but this could be a good thing, since as it decreased in Asia, other countries and smaller miners have got the chance to adapt and perhaps mine a bit more, as mining is based on the principle first come, first served.
Could it adapt?
As you can see, there were some adaptations to the whole situation on the global level. Since the whole world was affected, but the peaks were not at the same time, there was time for the market to adapt and stabilize.
We had mentioned before that as the US was affected by the SARS-COVID-19, there was a decrease in trading in the cryptocurrency market, but the experts have seen that as the US decreased, some other countries increased in the trading keeping the market somewhat stable.
The same goes for the mining of the coins since the biggest miners are in Asia, and once it was affected by the virus, there were some setbacks and a decrease in the mining in this part of the world. But, due to the fact that they are not the only ones, we have witnessed the distribution of mining all over the world, compensating the losses and mining of different coins.
Are there consequences?
When it comes to this industry, as we have stated, physical distancing was not a problem for it since the whole market depends on the internet, and everything can be done from home. But, like all industries, we have seen some changes in the market, and they are mainly due to the trading that has occurred and some moves that people have made in the past few months.
As the economy started to slowly collapse, especially in the United States, oil prices started to go down and down and down. This has led to prices of oil to drop so low that people started to exchange coins and buy as much oil as possible. By doing so, there was a decrease in the values of some cryptocurrencies since we have to withdraw the funds from the crypto market and the investment in the oil.
In addition to this, we have seen that people have started to do a similar thing with gold. This might be due to the fear of losing money invested, and want to transfer the funds into something that can be touched and seen.
The long term effects of this pandemic will be seen in the future. What experts have noticed is that all industries were affected, some more, some less by this pandemic. When it comes to the cryptocurrency market, there were shifts in trading and mining, but so far, there is no evidence that the market was heavily affected, as the oil market was.
There were some decreases in the values of some currencies, but this is not necessarily due to the pandemic. One of the advantages of this market is the fact that it works on the internet, so social distancing could only increase the trading rather than decrease it. All in all, it seems like this market was affected, but the extent of the affection will be seen in months to come.