With the raging COVID-19 pandemic altering the world as we know it, the financial market seems to be the one facing a major upheaval. Monetary crisis and the need for a safe haven have driven most people to look out for new ventures.
While cryptocurrency loyalists are staunchly ardent in their belief in the crypto market and its increasing adoption, some still feel the apprehension. For those who feel the hesitance, it is not unusual. The volatile nature and the fluctuating price of digital currencies compel people to have a second thought before diving into this world.
DBS Bank report
Recently, the highly revered report of the DBS Bank based in Singapore detailed the present scenario of digital or cryptocurrencies. The observation made by the author, Taimur Baig, chief economist of the prestigious multinational bank, stresses the two varied phases that have changed the cryptocurrency market. He divided it into the pre-pandemic period and the post-pandemic period. Amongst other cryptocurrencies, Bitcoin has gained the most impressive momentum with fluctuations lowering it to almost $4000 in 2020’s first quarter and then having a steady pace of around $9,500.
According to Baig, the demand for Bitcoin was mainly speculative during the pre-pandemic period. People were stunned by the growth and wanted to invest a tiny portion of their assets. However, the pandemic has shaken the foundation of what we know. In the post pandemic era, Baig believes that Bitcoin could become a safe haven currency just like gold. For more information visit Bitcoin Billionaire.
Different things that can cause Bitcoin adoption in this pandemic
Excess stress and the urgency to have a safe-haven currency can lead to the fast adoption of Bitcoin in this madness of the pandemic. The trends given below can offer more insight into the reason for this accelerated adoption.
- Currency crisis
The present currency crisis scenario in Lebanon of Venezuela is shocking and has driven home a significant point. Moreover, the hyperinflation of reported countries across the globe is bound to make you think again. Is it truly safe to link your investments to any state-run currency?
The startling financial crisis that is happening to countries across the world is a stark reminder that it can happen to you too. In that case, are you prepared to deal with such an economic blow? Perhaps, tethering the investments to the cryptocurrency can be a safer bet.
Baig has an alternative solution to this rising issue. He explained the possibilities of Bitcoin if it is linked to a limited-circulation currency. However, the transactions must be on view in the blockchain.
- Integrating Bitcoin in the present financial infrastructure
What is better in introducing something new than incorporating it in an already established institution? The best way to encourage and market the use of cryptocurrency is to integrate it with the traditionally existing financial institutions.
Apart from gold, Bitcoin could become the safe-haven asset that remains unaffected despite turbulence in the country’s economy.
- Reliable alternative to present currency
At present, there are more than 2500 types of cryptocurrencies in circulation across the globe. The entire crypto market has an impressive around $360 billion market cap. Out of all the alternatives, Bitcoin dominates the market with a market cap of approximately $170 billion. The second position is held by Ethereum that has a market cap of around $40.6 billion.
The volatile fluctuations of the price have resulted in the rise of several Bitcoin millionaires. With a fixed amount of coins that can be circulated and the heavily encrypted Blockchain, Bitcoin can stand against inflation and the economical shifts in the nation. Moreover, one of the main pillars of blockchain – decentralization ensures the blockage of any influence from the government.
Though the increased Bitcoin adoption may come as surprise, if you are an amateur in the cryptocurrency world, it is rather credible. In these hard times, it is vital to look out for options that can provide you the kind of security that you need. Digital currencies, more precisely, Bitcoin, has tremendous potential and can gain massive traction in the present as well as the future that is to come, after the pandemic is dealt with. However, the response of the public post the pandemic remains to be seen.