The outbreak of the covid-19 pandemic had a major impact on the world. Several businesses were forced to shut down, whereas many industries made huge profits. The covid-19 has also affected the Bitcoin and altcoin market in several ways. Investing and trading in currencies has become the new trend in the market.
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In this article, you will get insights into the positive and negative effects of the covid-19 pandemic affecting the bitcoin market.
The Impact of Covid-19 Pandemic on Bitcoin Market
The bitcoin market has risen since the beginning of the pandemic. The value of BTCs increased astonishingly, making it the most valuable asset in the market. Plenty of millennials have made quite a fortune by investing in crypto coins. People have made millions and billions of profits during the pandemic, creating a huge impact on the crypto market.
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It will not be fair just to look at the positive impact of the covid-19 pandemic on the bitcoin market. There is a negative impact as well that leads to raising concerns about bitcoins and altcoins. The environmental concerns regarding the mining of BTCs have caused the value of bitcoins to go down for a straight few weeks. There are alternative crypto coins like Ethereum, Binance Coin, and Tether, which are giving tough competition to BTCs.
The Positive Effects of Covid-19 Pandemic Affecting the Bitcoin Market
Highest valued asset
The crypto market is well famous for its highly volatile nature. Unlike other digital assets, predicting the price of cryptocurrencies is very difficult.
Sometimes experts might often fail to predict the change in the value of BTCs even after years of expertise in trading in cryptocurrencies. Even with such great risk, people invested in BTCs, making them the highest valued asset during the pandemic.
The wide acceptance of bitcoins
Several countries and governments accepted BTCs as a legal digital currency to promote the use of cryptocurrencies as a medium of exchange. Bitcoins are one of the oldest digital currencies which was made to transfer money digitally from one person to another without interference from central banks or financial institutions.
During the pandemic, the need for digital currency to make online payments arose, and all these features led to wide acceptance of BTCs as a medium of exchange and a digital asset to invest in.
Rise of the bitcoin market
The rapid growth of BTCs during the covid-19 pandemic is ground-breaking. The role of cryptocurrencies has an important role in raising the bitcoin market. Digital currency made possible peer-to-peer online payments conveniently. Taking this as an opportunity, industries and businesses were formed based on multiple new concepts to earn profits from it.
Several investors choose to convert their FIAT money into cryptocurrencies to avoid inflation in the economy. Websites and applications were created to ensure simple and easy trading in cryptocurrency. All of this gave a huge push to the rise of the bitcoin market globally.
Increase in bitcoin investors
The wide acceptance of crypto coins all around the globe led to an increase in BTC investors. The other commodities and digital assets were losing value during the pandemic, whereas BTC was left immune to the downfall.
It gained more popularity globally with its revolutionary features that have the power to change the old monetary system providing a decentralized economy with no control over your money by the central authority.
A healthy environment for bitcoins
The ground-breaking surge in the value of BTCs provided a plethora of opportunities for new business ideas and the formation of industries based on bitcoins and altcoins. Several businesses dealing with cryptocurrencies have boomed during the pandemic and helped in the formation of a healthy crypto environment to promote economic activities.
Several multinational companies have introduced BTCs as an alternative mode of payment for their customers, and central governments of many countries have legalized BTCs as a digital currency for making transactions.
The Negative Effects of Covid-19 Pandemic Affecting the Bitcoin Market
Increasing environmental concerns
BTC mining is necessary to confirm the transaction and record them into the blockchain. It is also the only way to add new BTCs into circulation. BTC mining nowadays is very expensive and consumes a lot of energy which has led to increasing environmental concerns related to mining BTCs. This also made investors switch over to other altcoins and caused a downfall in the value of BTCs for several weeks.
The increasing myths of bitcoins
The increasing myths of BTCs during the pandemic have negatively affected the bitcoin market. Many investors think the surge in BTC prices won’t last long, and it is safer to invest in tangible assets like gold and silver that have intrinsic value.
Several governments are yet to legalize the concept of BTCs as a mode of payment. There have been several other myths related to BTCs acting as a barrier towards the growth of this digital currency.
There have been several reasons that led to a surge in the bitcoin market during the covid-19 pandemic. However, this price increase has not been constant. There are factors negatively affecting the fall in the value of BTCs, which makes bitcoins and altcoins volatile compared to other commodities and assets.