The Covid-19 pandemic outbreak had hit the world very badly. Quite expectedly, it had a very bad impact on the economy across the globe. Bitcoins and other cryptocurrencies are also being regarded as a part of the financial market today and many people are curious to know about how Bitcoin price is being affected by impact of coronavirus. Learn about the future of cryptocurrencies if you want to start trading bitcoin.
Impact of Covid on Bitcoin Prices
There has been an increased correlation between the equities market and Bitcoin since the outbreak of the coronavirus. Due to a sudden flight to liquidity, many investors had margin calls in equity – which had to be compensated by liquidating other assets into cash – such as Bitcoins, in order to satisfy those margin calls to some other points.
This is exactly the reason why, in the months right after the outbreak of Covid-19, there was a drop in the prices of Bitcoin and other cryptocurrencies. There were lots of uncertainties in how everything would pan out and Bitcoin was no exception. The liquidity crunch after the pandemic outbreak spooked quite a few of the crypto investors and market makers, as can be seen from studies.
But a slow rise in prices of Bitcoin and other cryptocurrencies was predicted, and this proved to be true. Even when the global economy was in one of its worst situations, there was a steady rise in the price of Bitcoins, due to which – many investors considered it to be a safe haven.
Slowdown and Growth
In countries like India, where cryptocurrencies are a nascent industry even today, the Novel Coronavirus has had a huge impact. The industry was already dealing with different types of issues, such as scams, liquidity and regulations and the outbreak of the pandemic only added to the concerns.
There was still plenty of ambiguity surrounding Bitcoins, although many new companies were coming out with various interesting products. But in the next couple of years, things began to be changed. Now with government backing, Bitcoin can surely be regarded as a mainstream asset at the moment; although it has not been institutionalized yet. In 2021, the price of Bitcoins went through the roof and there had been a huge rise in its fortunes, encouraging investors from across the world show interest in purchasing it.
Thus, cryptocurrencies like Bitcoin prove to be highly resilient in the face of economic meltdown and extreme uncertainties even after the outbreak of the Omicron. Luckily, the rapid increase in digitization and faster accessibility of high-speed internet connection across the globe led to a ripe environment for the flourishing of digital currencies.
- In the last two years, since the outbreak of the pandemic, Bitcoin has performed outperformed itself tremendously in terms of value – by rising multiple times over its previous market value.
- Cryptocurrencies like Ethereum and Dogecoin were going quite well as well. In fact, the cryptocurrency market is on its longest dream journey till date.
- With a lot of social efforts in fighting the coronavirus and the vaccination drive going on at full speed, one can have an optimistic view of the cryptocurrency market.
Future of Bitcoins amidst the Pandemic
Many emerging markets have moved to integrate Bitcoin and various other cryptocurrencies into their own economics. For example, the adoption of cryptocurrencies in Costa Rica flourished due to the announcement that its employees might get paid legally in cryptocurrencies. In the Philippines, quite a few cryptocurrency exchanges were approved by the central bank of the country. More people are inclining towards using digital payment methods since the pandemic. Due to a shift in payment trends, all the cryptos are slowly entering as one of the legit payment methods.
At the moment, governments across the world are taking some bold measures – in order to make it easier to hold, sell and purchase Bitcoins and to regulate the same. Until that happens, the Bitcoin industry and the crypto industry in general, will continue to face many struggles and uncertainties – which has been exacerbated further by the pandemic situation. However, the constant rises in the prices of Bitcoin – despite fluctuations in its market value – hints towards positive developments in the area and wider acceptance for Bitcoin in the years down the line.