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How COVID-19 Is Reshaping the Crypto Industry

How COVID-19 is Reshaping the Crypto Industry

jessieconnor
by Jessie Connor — 1 month ago in Blockchain Technology 4 min. read
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What started as a pandemic in China soon became a worldwide pandemic. Not only does COVID-19 affect our everyday lives but it’s also changing the world of trading.

The prices of everything from stock to gold are rapidly changing and it looks like this will go on. Many traders are wondering how COVID-19 affects crypto. 

The impact of the pandemic on digital currencies is greater than you might think and it’s safe to say that it’s reshaping the crypto industry. But how exactly is the crypto industry changing? Read on to find out.

Crypto is becoming the new gold

If you’re a trader, you know how valuable gold is. If you’re not one, you might’ve still heard that traders and investors use it to store their wealth. This has been going on for centuries and gold is still the most popular instrument for portfolio diversification. However, the COVID-19 pandemic is introducing the new rules and gold may no longer be as effective as it once was.


When coronavirus first broke out, traders started panic-buying gold because they knew their stocks will lose value. Soon, borders were shut down, and transporting gold became impossible.

Logistics became a huge issue and gold started losing value. When this happened, traders turned towards the “new gold” – digital currencies. Just think about it.

When you buy digital currency, it becomes yours as soon as you click the button. This means the pandemic can’t stop you from investing and trading with cryptocurrencies.

Traders have learned a valuable lesson during the pandemic and they’ll start buying digital currencies even more in the future. They want their investments to be as safe as possible, and at the moment, that’s exactly what digital currencies are all about.
Also read: 4 Blockchain Predictions for 2020

The value of crypto went down as expected

It’s impossible for the prices to stay the same during a pandemic like the one we’re facing in 2020. Trading became even more difficult and some traders were skeptical about buying crypto.

Why? Well, over 70 percent of the world’s mining power is located in China and South Korea. Given the fact that the pandemic broke out in Asia, their fear was natural. The good news is that they weren’t completely right.

Sure, prices of crypto went down but so did all other prices. The nature of the industry is such that miners can do most of their work from home.

The companies that mine these currencies opted for the right approach and the pandemic didn’t stop them from operating. As a result, the drop in value was minimal, and investing in crypto still makes a lot of sense.

What people are now wondering is what will happen with crypto in the future. Buying these currencies is safe at the moment, but will it be the same in the next few months?

All prices are going down and that’s something we’ll just have to get used to. However, buying crypto is still a good idea and the pandemic shouldn’t stop you from doing it.

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Buying the “right” currency is critical

It’s obvious that the pandemic didn’t have the same impact on every digital currency out there. It all comes down to how the companies that sell them reacted to COVID-19. Not all of them took the same approach and some of them did better than others.

There’s hardly a better example of how some currencies performed better than Monero. This cryptocurrency saw an enormous 23.7 jump during the pandemic.

Traders who took their chances with Monero did well and they’ll continue to search for the ones worth investing in. On the other hand, some currencies suffered a lot because of COVID-19. You probably already know that Facebook’s Libra was scheduled for release in 2020.

With the way things are at the moment, it looks like we won’t see Libra in action until 2021. This may change some traders’ plans and hurt their financial situation.

Because of this trend, it’s more important than ever to do your research when buying digital currencies. If you browse the web, you’ll see that another currency that’s doing great is Ripple. If you’ve never used it before, learn everything there’s to know how to buy Ripple and add it to your digital wallet.

Banks’ view of digital currencies will change

Cryptocurrencies have been around for quite some time but banks still aren’t keen on buying it. Some banks wanted to do it but regulators weren’t attracted by the idea of buying crypto. In Germany, over forty banks tried to get a crypto custodian license but have failed to do so.

The reason why banks still don’t hold crypto is that it’s quite different from the way they usually do things. It’s common for banks to rely on mathematics and this approach is often the right one. However, during a pandemic such as the COVID-19 one, mathematics doesn’t apply the way it usually does. In situations like this, banks need scarce assets they can hold on to. Enter crypto.

The pandemic has the potential to change the way banks see crypto and start buying it. Instead of storing gold, banks will start to hold the “new gold” or “digital gold” as some call it. This is huge news for the crypto industry and traders should keep a close eye on what’s going on.

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Also read: How Blockchain is Going to Revolutionize the Payments?

Conclusion

There’s no doubt the COVID-19 pandemic is one of the biggest disasters the modern world has ever faced. While it will most certainly affect the economy, buying digital currencies is still a great idea. In fact, the crypto industry is one of a few industries that will do very well during the pandemic.

Another thing to have in mind is that crypto is closely related to technology. Technology will continue to evolve after the pandemic and these currencies might reshape the entire world. They might even take the throne and push “traditional” currencies to the side.

One thing’s for sure – now the perfect time to buy crypto and traders shouldn’t let COVID-19 stop them from doing it.

Jessie Connor

Jessie Connor is a passionate writer and researcher from Brisbane, contributor at several business and lifestyle blogs, hooked on yoga and healthy living. She loves to spend her free time travelling, reading and of course – shopping!

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