Wednesday, October 4, 2023
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6 Ways COVID-19 Will Affect the Crypto Industry

The Covid-19 pandemic’s grip on our planet doesn’t seem to be loosening. As we write this, we are in the so-called third wave and, judging by the rising numbers of infected, far from its end. Every day, thousands of new cases are reported all over the world.

The hospitals are starting to overflow with patients in need of critical care again, unable to cope with so many of them. While the end is nowhere near, not everything is gloom and doom.

The news of a new vaccine has lifted the spirits somewhat, but it will take months before it is approved and produced in numbers sufficient for all who need it.

With that in mind, the potential effects Covid-19 will have on financial markets and the crypto industry is becoming clearer.

1. Covid-19 Impact on Financial Markets

The recession caused by the Covid-19 pandemic threatens to become the largest in history. Several market collapses (imaginatively titled Black Monday, Black Thursday, and Black Monday 2) in a span of just seven days have caused widespread panic and turmoil.

Nations are struggling to find answers and save their economies with every measure at their disposal, but the jury is still out on their effectiveness. As unemployment soars, people have trouble with paying their rent and bills and unless something drastic is done, like a rent freeze, America will become a nation of homeless.

The election results have brought a say of sunshine, as Trump’s inept administration is finally exiting the scene. Hopefully, President-elect Joe Biden will have a more competent team to battle the recession.

2. Can Crypto Industry Weather the Covid-10 Crisis?

Judging by the latest result, cryptocurrencies seem to be weathering the recession better than fiat ones. This was only to be expected, because, unlike fiat currencies, crypto coins aren’t tied to national economies. And national economies all over the planet are struggling to combat the effects of the recession.

That has led many people to explore topics like how to buy etoro bitcoin, as cryptocurrencies seem to be more resilient to the ongoing crisis. How long that situation will last is hard to predict, but at the moment, investing in crypto seems like a prudent choice.

Can Crypto Industry Weather the Covid-10 Crisis

3. The Rise of Blockchain

If we have learned anything from the latest presidential elections in the United States, it is a need for a secure and unquestionable voting process. The sooner blockchain technology is implemented in selecting out political leaders, the sooner we will get it. And that is just one aspect of how blockchain can improve our lives.

It also adds to the credibility of crypto coins based on it. The inherent security features of blockchain can significantly improve the somewhat bad reputation of cryptocurrencies. While hacker attacks on crypto exchanges may never go away, the risk can be massively reduced with blockchain. That alone should do wonders for the confidence of investors and their willingness to invest in crypto.

4. FOREX and stock markets volatility

The volatility on financial markets has given a pause to many investors, unwilling to trust their money to unpredictable spikes and ebbs caused by the Covid-19 recession. While some companies seem to be immune to these effects, more and more investors are looking for alternative places to park their capital.

The Crypto industry seems like a logical conclusion for many of them. Forex traders are especially hit hard and they are jumping ship in mass. Many of them are landing in the crypto industry, looking to capitalize on their knowledge of financial markets.

5. Increased Mining

As people are forced to spend more time at home, some due to quarantines and lockdowns, some due to unemployment, there is a significant surge in crypto mining. For many, that is the only source of income they have access to, and are trying to get as much out of it as they can. This has led to a huge uptick in available crypto coins on the exchanges, somewhat balancing the prevailing trend of rising prices.

The long-term effects of this are still unknown, but in the short term, it has helped stabilize the markets and control the prices. But even with that, cryptocurrencies are gaining in value every day and people who hold positions in them are making a windfall.

6. Transition to Paperless Payments

While paperless payments have been around for ages, the Covid-19 has sped up the process of its application worldwide. If no money changes hands, the risk of infection is greatly diminished and cryptocurrencies are poised to take full advantage of that fact.

As more and more big banks accept them as legal tender, crypto coins are bound to find their way into our everyday transactions. The exchange rates, which still fluctuate wildly, are the only thing that is stopping them from being used in that manner.

Having to use a calculator to find out just how much milk is worth in bitcoin today is hardly an enticement for its use. Of course, all of these problems are solvable, but they require time and a not small amount of money thrown at them. Whether there is a will to do that is still unclear.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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