How Coronavirus Has Changed the Attitude of People Towards Cryptocurrencies

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The FINANCIAL — The coronavirus pandemic which began in December 2019 in China has since spread to other countries across the world. It is the trending news headline in the year 2020 with over 3 million confirmed cases, over 1 million recovered cases, and over 200,000 deaths.

All sectors and markets have somewhat been affected by this pandemic, and the crypto market is not exempted. Sometime in mid-March 2020, the number 1 cryptocurrency – the Bitcoin – dropped in price to sell at $4,000. This drop was huge and sent panic across the cryptocurrency market as the coin was valued at about $10,000 the previous month.

Most of the cryptocurrency traders feared that the price will drop further the coming month but fortunately, it gained value and currently sells above $8,000. These events have changed the attitude of people towards cryptocurrencies. Unlike earlier, crypto traders are certain about the future of the crypto market.

How Coronavirus Affects Cryptocurrencies

When the coronavirus outbreak began, many experts assumed that cryptocurrencies would be the go-to asset at such a time. So, it was very much surprising when the bitcoin crashed and lost about 15% of its value. If not for the assumptions, this shouldn’t have been so surprising.

The value of the Bitcoin and other cryptocurrencies results from its demand as it is decentralized. Unlike FIAT currencies whose values result from the GDP of a country and interest rates. If people do not request to buy bitcoin, its value will drop.

With the coronavirus pandemic, a lot of people resulted in using acceptable public means of exchange which are the FIAT currencies. There was a need to purchase items to stock up for lockdown periods. The Bitcoin or any other cryptocurrencies are yet to be accepted as public means of payment; hence its demand reduced.

In such a scenario, the only method to maintain the value of the Bitcoin is through mining. Mining introduces new coins to the blockchain. Furthermore, China which is the region where the virus originated from is one of the major countries where cryptocurrencies can be mined. About 65% of the Bitcoin mining power is from China. On the other hand, South Korea, which recently made crypto trading legal, is also a significant mining contributor and the country is dealing with over 10,000 cases of coronavirus.

The Current Attitude of People Towards Cryptocurrencies

A bitFlyer report revealed that the number of crypto believers across Europe has increased by about 3% since the start of 2020. Ideally, bitFlyer carries out Crypto-Confidence Index research every year. It involves 10,000 participants, and it is carried out in over 10 European countries.

The countries involved include Poland, Spain, Belgium, Denmark, Italy, Netherlands, the United Kingdom, France, Germany, Norway, and France. The return this year was 66% as opposed to 63% in 2019. People are certain that in the next decade, cryptocurrencies will be more widely accepted than now.

From the data collected, the most significant percentage came from Italy, which is very surprising considering how heavy the pandemic hit the country. About 72% of participants in Italy were confident of bitcoin having a secured future. With this, Italy stands as the most crypto-believing country.

On the converse side, the United Kingdom emerged as the least-crypto believing region. Only 56% of participants from the country were confident of bitcoin having a secured future. This percentage is also lower than what was obtainable in the previous year’s research which was 57%. However, because this change is not particularly drastic, most UK cryptocurrency brokers haven’t even experienced any drops in the trading activity of Bitcoin and altcoins that their clients trade on their trading platforms.

The UK wasn’t the only one to have dropped certainty levels in the future of cryptocurrencies. Reports also showed that Norway dropped to 67% from 74% in 2019. Both Netherlands and Poland had a 70% certainty level of a secured future of cryptocurrencies.

Similarly, Paxful – a popular peer-to-peer crypto exchange – conducted a survey in the American region. This survey showed that a good number of Americans presume cryptocurrencies to be a worthwhile alternative to FIAT currencies. About 69% of the survey participants believe that bitcoin can be used to make real-life payments, while about 50% think it will help in the fight against corruption and inflation.

The significant ways people believe will increase the use of cryptocurrencies include institutional crypto investing, the resurgence of altcoins, use of blockchain technology by enterprises, and mobile mining.

The Future Of Cryptocurrencies

The Future Of Cryptocurrencies

After the major crash in mid-March, the Bitcoin has been performing fairly well. The most popular cryptocurrency is above the stocks and dollar in terms of current-year gains. It is also on the verge of catching up with gold with just a 2.1% difference.

The crypto industry awaits the third block reward halving of the Bitcoin. This halving will see inflation reduce to 1.8%. Also, the available supply of the new bitcoins will be halved for every 10 minutes. It is assumed that this block halving will result in the rise of new bitcoin millionaires.

In summary, whilst the future of cryptocurrencies is still not overly certain, a good amount of people believe that there’s hope of increased usability in the coming years. The rise of Bitcoin interest accounts on the market, coupled with the recent rise f the currency due to Elon Musk, not to mention its usability on e-commerce websites, the future is looking bright. And as the pandemic rages on, and everyone turns to online markets and are clutching at extra ways to develop earning potential, this is looking positive. This is good for the industry as the world awaits the end of the coronavirus pandemic.

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