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The effects of the pandemic on the future of cryptocurrency

Dan Martin

Editor

 


It’s no longer business as usual, and crypto investors are now living with the realities of a pandemic.

crypto

The effects of the pandemic on the future of cryptocurrency. Source: canva.com

If you had mentioned the emergence of a pandemic back in 2019, very few people would have believed you. It’s astonishing how a virus – so relentless – has changed how the world operates. From stock markets to cryptocurrency, every business is now dealing with the effects of the virus.

For both new and established investors, learning the effects of the pandemic is now necessary and unavoidable. Investors need to know the positive and negative effects of the pandemic on their business. They need to observe the current trends and understand how the pandemic impacts the future of cryptocurrency.

The positives

Following the emergence of the second wave of COVID-19, it’s clear that the pandemic is not going away anytime soon. It may take weeks or even months before businesses can go back to previous routines.

For some, going back to the good old days may never happen, and industries will have to adapt to a new normal. But despite all the changes, it’s important to acknowledge how the pandemic has positively impacted the cryptocurrency market.

1. Improved online communication

The pandemic has opened huge opportunities for online communication. If you look closely, you’ll discover that several online platforms, rarely used before, are now a standard application globally. Through social media channels and video conferencing, it’s now easier to share investment information.

Because of the rise in online communication, information on the crypto market has been spreading rapidly. Young investors, some of whom are in their late teens, are now cryptocurrency holders.

The rise in viral videos has also boosted the cryptocurrency business. An example of this is how Litecoin-based cryptocurrency, Dogecoin, experienced a sudden surge in July 2020 based on a viral Tiktok challenge.

2. Growth of the FIRE(Financial Independence and Retire Early) movement

Seeing that most cryptocurrency investors are below 65 years of age, it’s clear why the FIRE movement is such a vibe. Since young people are the most affected by the current job market, the crypto on fire movement offers excellent lessons for early financial independence and retirement goals.

There’s also no doubt that more liquid and secure investments such as the Bitcoin and LTC have experienced a tremendous improvement. And with the future of cryptocurrency looking brighter, most young people are realizing the importance of stable currencies that don’t appear and disappear without warning.

3. Better opportunities for mining personal currencies

The pandemic has offered improved chances to learn how to mine personal cryptocurrency coins. With so much time on your hands, it’s no wonder you can take on challenges that promise higher profits in the future.

But like every other business, the start is never easy. The mining of personal currencies is challenging to start, and it will take quite some time to figure everything out. But with the right hardware, software, and crypto wallet, you will be well on your way to financial freedom in no time. And with the market being slow at this time, this is the perfect opportunity to learn, execute, and evaluate your results.

Think of it this way: If you start mining lower currencies right now, you can exchange them with popular coins later on. Lower coins like Monero can mine faster at the moment. Later on, you can exchange them with bitcoins that promise better gains in the future.

The negatives

The pandemic has affected almost all industries in the world. The travel industry, hospitality, and retail are all operating under the uncertainties of the pandemic. And with the rising number of COVID-19 cases and deaths, there’s also a significant impact on the cryptocurrency business.

1. A decline in the cryptocurrency prices 

The cryptocurrency experienced the worst 12-month low back in March 2020. On March 13, 2020, the prices dropped from $7650 to $5500, the worst decline since September 2019. Based on this data, it’s a clear indication that the profits foreseen in 2020 are a far-fetched dream for some investors.

Furthermore, the outbreak brought about the fear of a continued decline in currency values. Recent predictions indicate that if the prices don’t increase by the end of the year, there are more significant asset degradation risks.

If this goes on for too long, it can lead to the loss of confidence by investors. Reduced investor confidence could lead to a collapse in the market, part of which may take some time to recover.

But luckily, predictions have projected a surge of 50% by the end of 2020. The prices are also expected to keep going up as long as more investors continue flocking to the market. And since government initiatives are stabilizing the market, the impact may continue being felt amid the surging COVID-19 cases.

2. Increase in scam

The pandemic has attracted as many real investors as it has the online scammers. From fake ICOs to imposter emails, cryptocurrency scam is now a stark reality for most investors. Through spam emails and websites, scammers are quickly discovering new ways of redirecting currency payments from official sites.

Due to the increase in cryptocurrency scam, investors will now have to invest in additional tools to safeguard their wallets. It will also take some extra time to research and verify genuine intermediaries. With time, security protocols such as VPNs and proxies may also be a necessary tool for hiding your online tracks.

3. Challenges in choosing a currency

While the uncertainty surrounding the impact of the pandemic lingers on, it’s challenging to decide what currencies to trade. While bitcoins and LTC are the most preferred due to their profitable returns, beginners still have challenges breaking into the market.

Anyone that is just starting wants coins that convert faster and deliver better returns. But with the pandemic, lower value coins offer more significant risks. Thus, it may take some time before beginners find their space in cryptocurrency and reap huge returns.

The bottom line

The pandemic has exposed challenges in the cryptocurrency market but has also brought about more gains. For both the new and experienced investors, the above effects will help map your cryptocurrency goals.

It’s clear that the pandemic is not going away soon, and this will continue to affect the coins’ value. But as long as there are people interested in the market, future predictions look promising.

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