The novel coronavirus (now known as SARS-CoV-2) has disrupted the global economy ever since countries started implementing lockdown measures. With researchers and scientists racing to develop a vaccine and governments issuing strict containment measures, trading across all major markets is dropping at an alarming rate not seen since the market downturn of 2010.
As the Dow Jones continues to hurt from demand disruption caused by the pandemic, cryptocurrency traders are standing by for whatever developments might come up.
Uncertainty lingers over whether the global market could recover from this disruption, but experts are quick to point out that, with the right measures in place, the global market might as well experience an upsurge once the pandemic is under control. But what challenges (and gains) await the cryptocurrency market? Here are a few important takeaways.
The thing is, cryptocurrencies like BitCoin will certainly gain from the current economic slowdown. Central banks find themselves scurrying for bailout packages and printing more money, sparking concern that such moves could lead to inflation. As a result, investors are turning to other assets like cryptocurrencies to balance everything out. Added to this is the fact that the increased demand for BitCoin is the result of panic-trading among the world’s largest markets, thereby increasing the value of cryptocurrencies to $6,000, according to an Independent article.
A trip to uncertain-ville
As much as BitCoin gains from the ensuing economic downturn, experts warn that this moment of prosperity will certainly feel the pressure. The same article points out that, should the lockdown aggravate the current situation, traders in the cryptocurrency market will find themselves demanding cold hard cash. Only time will tell, but for now, investors are still relying on cryptocurrencies to diversify their portfolios and save themselves from sinking further.
BitCoin to the rescue?
Blockchain technology has come a long way (or maybe not too long) since it was first introduced in 2008 by the mysterious Satoshi Nakamoto. Since then, the platform that cryptocurrencies run on has impacted the worlds of tech and finance. And now, it’s joining the fight against SARS-CoV-2. Supercomputers that were mining digital currency are now focused on analyzing and testing large volumes of data to find an optimum configuration for a vaccine. This, for sure, will cut the time needed to produce and distribute the right drugs not just for SARS-CoV-2, but also for other viruses.
Adaptation is the key
For sure, the economic impact of the pandemic will also provide opportunities to look at other alternative income sources and skills, opportunities that have existed even before the SARS-CoV-2 was first detected. Across the globe, companies and governments are switching temporarily to work-from-home setups while online shopping experiences an upsurge. These developments are encouraging consumers and entrepreneurs to adapt accordingly. Cryptocurrencies, for the most part, could be in demand as an alternative investment vehicle. This, for sure, will encourage ordinary people to enter the trading game by taking up a career in investment banking or in maintaining blockchain systems as programmers.
The pandemic has certainly caused a great deal of mayhem to traditional markets and there are a few good reasons to stay the course with cryptocurrencies. Then again, the full extent of the effects to trading is yet to be ascertained and investors should remain vigilant for what’s to come.