For the global financial system, it has been a few weeks of unparalleled turmoil as the corona virus plague breaks all records, carrying world capitalism to its knees as the disease is spreading. The suspicions environment with the COVID-19 pandemic and its influence on the global economy are engaging both the people and the markets with fright. We are now suffering aftershocks. In just a few short weeks, everything has transformed — people’s hobbies, habits, community life, and reality. School corridors lie emptied. Paintings in art classes are left incomplete. The buzz of daily life has been keeping quiet, and it perceives like we are entering a new and unwanted dimension.
Besides, the cryptocurrency market also did not run away from the pandemic surprises as investors witnessed a huge price fluctuation due to the corona virus explosion. Most experts confirmed that the reduction in the rate of cryptocurrencies is resulting from a general fear of the stock exchanges. Amidst the massive crash of transactions, players began to recover their investment strategies and, mainly, selling cryptocurrencies.
The following article will try to explore what led to the enormous sell-off and will end with a little confidence that cryptocurrency might not have said its last word yet related to its role in the financial world.
Corona virus and cryptocurrency market:
The novel corona virus captured the world by a thunderstorm like a lightning strike from a clear sky. In just a couple of months, approximately 200,000 people from the globe have been infected. Meanwhile, the number of fatalities continues to increase. This urges governments to take quick action, and it feels as if the entire world is under isolation. Indeed, the fear of the anonymous and how far it could go causing much mess in the financial and stock markets. Companies are feeling the effect of the virus as major indexes recorded lost that haven’t been seen since 2008 are higher-risk.
Let’s just say the cryptocurrency market felt the strike as well. Its capitalization was basically halved, as it missed more than $150 billion in a few more days. Indeed, the cryptocurrency market is quite young in the financial world. In such a condition where banks will keep printing money, which will deflate its quality, people might ultimately start looking for different means of payments outside of governments and banks. That could be the splendor moment Bitcoin had been waiting for.
High demand for digital payments:
The corona virus pandemic is perhaps to accelerate the trend towards the digital forms of valued trade rates. The World Health Organization is pressuring people to use touch-less payments as a means to reduce the spread of COVID-19. Moreover, with central banks in different nations isolating physical amount for the times of up to 14 days before they release it in return for the circulation, from the tome of novel corona virus can survive for several days on emerges – the concept that affected cash could obtain you sick might result in more people to take digital cash technology.
Catalyst efforts to prevent the slump:
Cryptocurrency has missed over 30% of its worth in the last five days, overcoming sharp losses for capital from stocks to oil as the epidemic fraught havoc on the daily life of many millions. To assist stave off a regression and diminish the financial tolling of the COVID-19 epidemic on the businesses, central banks across the globe have taken extreme efforts to pump cash-flow into the markets. While they could perhaps help to arouse the economy, these efforts are also likely to decline the value of the U.S. dollar and another fiat foreign currency, by increasing the amount of money available.
Cryptocurrency is not stable for financial market woes:
The leading cryptocurrency bitcoin collapsed to prove its status of a sanctuary during the new virus outbreak as the price rolled to historic lows. Although it is difficult to measure the true connection between the bitcoin price and the financial market woes caused by the corona virus outbreak. This month found to be one of the worst months for the foremost cryptocurrency since February 2018. Corona virus pandemic has now increased from a deadly health urgency to a global financial disaster.
Is there any subsequent cryptocurrency?
Investors have seen electronic funds as an alternative to the latest financial system, just now, seemingly, the situation has turned. Consequently of the general panic, cryptocurrencies obtained the status of risky assets again. People demand cash on hand instead of an unsettled digital token. The history of Bitcoin demonstrates many 80%+ dropdowns, after which the price stabilized and slowly began to grind upstream.
Time For possibilities?
In all cases, the world has to look at the range of this virus, and if the financial crisis will assist with its outrage. Governments are already beginning to take the measure. However, the fear that COVID-19 virus has only been the pin to the business bubbles, which has been bloated for too long. It’s also a fact, though, that conditions like these create ever-changing opportunities for the cryptocurrency field, in general, to present itself in all its fame and decouple from standard finance as a viable substitute.
Cryptocurrency experts around the world are almost united in their predictions. A large number of them believe that all the essential cryptocurrencies will be back on track rapidly, living up to their bright forecasts. At the same time, the latest crypto market review demonstrates some positive trends and news that are probably to boost the evaluations of digital money too. Therefore, digital asset investors can influence this potential for the gratitude to invest in the top cryptocurrencies stated above.
THE BOTTOM LINE
It isn’t the end game of cryptocurrency; given the current adverse macro-economic environment around the world, it is not breathtaking to see a crash in the cryptocurrency market. Regardless, it won’t be the end of cryptocurrency. Governments are actively introducing corresponding fiscal policies to deal with the situation, which will have positive implications on the crypto market. According to the possible scenario, in the coming future, the rates can restore by 5-10%. In every way, by the ending of spring, the cryptocurrency market would be well-balanced.