COVID-19 Outbreak and Crypto Market

The futuristic utopia that technological progress promises is coming ever closer at an astonishing pace, yet unseen challenges, have surfaced during the COVID-19 virus outbreak. The pandemic has managed to plunder and destabilize the world in just the last few months, putting in danger not only lives, but economic boundaries, well-established global businesses, and the very essence of the world’s financial system. 

The uncertainties surrounding the evolution of the coronavirus and its impact on the global economy are gripping. The world was not ready for a global pandemic, just as it wasn’t during the Spanish flu of 1918-1920 where tens of millions died, along with similar global plagues in history, like the Black Plague of the 1300s.

What is different this time is the fact our world has never been more technologically connected, with people able to work remotely, buy online, see a doctor through video conferencing, and purchase digital currencies unencumbered by the limitations of fiat currencies.

Indeed, well before COVID-19 arrived on the scene, digital assets have become a slowly maturing niche. The last decade has seen a new kind of currency evolve, with the Bitcoin cryptocurrency having emerged at the right time to save the world with a new definition of speed, transparency, and reliability, thanks to Bitcoin’s twin revolution of the blockchain.

The King is Dead - Long Live The New King!

The 21st century is the digital century, and it is dictating a new set of rules. For centuries, during numerous crises triggered by various events, gold has traditionally been considered the safe haven to rule them all. Indeed, despite some fluctuations, its price has risen over time, while in the main, it has held its value well, and unlike fiat currencies, has never seen its value go to zero. However, despite being the most popular metal when a crisis is associated with liquidity or inflation problems, gold has not always successfully passed through global crises unblemished, with an example being the Great Depression seeing private gold ownership banned by President Franklin D. Roosevelt in 1933, and gold fixed at US $35 from 1934 for many years thereafter.

Meanwhile, an original and top-performing crypto-asset Bitcoin is playing its own game, weakly correlating with market trends.

Naturally, this has led to Bitcoin and gold having long been competing with each other for the status of a more effective protective asset, and in this situation, cryptocurrencies have some advantages. Shiny metal owners depend on transport and logistics - sectors of the economy that are prone to supply disruptions and logistics issues, given the times. Meanwhile, Bitcoin is a digital currency that exists in cyberspace and is not constrained by state borders nor transportation problems. This aspect acquires particular relevance in times of global panic when familiar ties are disrupted, destroyed and order upended.

Searching for a New Value Investment Channel

What is Bitcoin's core attraction point? Simply put, this asset provides the freedom to convert its value into a form of money that defies manipulation.

Before Bitcoin stepped in to play a decade ago, people had no choice but to be caged into a defective currency system. The Bitcoin protocol, based on the voluntary participation of the parties, is not controlled by anyone, and makes it possible for everyone to store and transfer value in a currency that is resistant to manipulation by central banks and global financial institutions. 

Different parties value cryptocurrencies and Bitcoin in particular for various reasons. Despite being mainly praised for enrichment due to its rapid price increase in 2017, it invariably attracts those who saw the degree of freedom inherent in Bitcoin, given that the world is experiencing endless economic disasters due to the fragility and instability of the global financial system, and even greater levels of public, private and government debt in the age of COVID-19, lockdowns and massive multi-trillion dollar government bailouts. 

However, it’s not only the crypto-anarchists who are praising crypto and Bitcoin in particular. Among well-known Bitcoin adopters is an American venture capital investor and billionaire Tim Draper, who has claimed that Bitcoin is a key to secure the financial future for millennials. Moreover, Draper also told CNBC that he is moving his stock portfolio to Bitcoin, presuming that “bitcoin in 2022 or the beginning of 2023 will hit $250,000”. Finally,Draper has recently given another optimistic forecast about Bitcoin - stating that he thinks “when the world comes back, it will be Bitcoin, not banks and governments that save the day.”

Bitcoin is Immune to Coronavirus

Today, the world faces a problem of an unusual nature. The virus outbreak in Asia was first regarded as a looming, but distant threat, yet now leads to the collapse of many companies and economies. Even more, it threatens disruptions in supply chains at international levels that have been forged by the blood, sweat, tears, global wars, technological advancement, international competition, co-operation and global progress made over many decades.

Europe saw stocks fall to their lowest levels since 2012 as the coronavirus continued to ravage share prices and investors weighed the extreme and unexpected economic hit. The pan-European Stoxx 600 index was down 2.7 percent, Germany’s Dax was 2.7 percent lower and Italy’s FTSE Mib had fallen 1.6 percent. During such events, investors need to search for a better investment instrument conducive to a much safer long-term perspective. 

Moreover, in times where market turmoil, caused by the virus, digital money and fintech apps have seen usage grow significantly, thus speeding the pace of overall technological progress. In fact, the COVID-19 pandemic has fueled a 72% surge in the use of fintech apps in Europe during the few last weeks as people globally try adapting to new working conditions, according to new research by the deVere Group. Digital money is safe-to-use to provide remote payments - a quality one merely thought of as a mostly just a convenience before, but now one that is more important than ever in a world that prefers electronic payments to the risk of handling potentially virus-infected physical currency.

Bitcoin may still be at an early stage of its lifecycle, and its price is unknown in the future, but it has been the most exciting and promising currency development since the development of fiat currency, and has ignited the imagination not only of billionaires, but the general public eager for an alternative to fiat currencies and precious metals. This is followed by the fact that Bitcoin is an asset that has almost unlimited potential in terms of price growth, and as Pantera Capital’s estimates show, has new price records that can be expected in 2021. Moreover, Nexo's researchers and analysts predict that a massive rise in the Bitcoin price could occur due to the upcoming halving event, and the level of $50,000 could be surpassed in 2020 alone! At the same time, researchers at the Kraken crypto exchange platform state that the Bitcoin price could reach $350,000 by 2045, with this last opinion based on the expected wealth transfer that could happen over the forthcoming decades.

Now, it has to be said that trying to pick the right moment to act can be ruined by trying to predict the perfect moment, and thus never acting at all. Thus, an opportunity to buy top-rating cryptocurrency awaits, and one must not be hesitant about whether to buy it or not, just as so many did when Bitcoins were worth pennies, rather than the thousands of dollars they are worth now.

As the world progresses and fights back against the pandemic, Bitcoin’s value and acceptance will only grow, from routine payments and daily coffees at Starbucks to much more sophisticated uses yet to be imagined and created by necessity being the mother of invention. Bitcoin has provided a new financial canvas with its users having painted an impressive first layer. Now the time has come to add more paint, life and color to the painting so a true masterpiece emerges and the full picture of endless possibility is undeniable to all.