Has anyone ever imagined the crypto market growth in the midst of a pandemic? The world came to a standstill as we watched the pandemic unfold claiming thousands of lives in its wake. It has brought fear and uncertainties that caused many systems to collapse. This includes traditional money systems. Both major and small financial markets suffered huge losses. Many employees were forced to stay home. Some managed to continue operations from the comfort of their homes while others were not so fortunate. Thousands lost their jobs which forced them to join the crypto market. For the government, there was nothing to be done except print more money to keep the market afloat.
Amid this pandemic, the world has realized that traditional money is not enough!
Different alternative assets have been established, but a few have lived to tell the tale. The cryptocurrency market has been in existence for over eleven years and counting. The market has seen its fair share of struggles. Despite this, it has remained adamant in its quest to change the global financial market. The pandemic helped different economics understand and appreciate the potential within the cryptocurrency market. More for its ability over their trusted traditional systems.
Martin Burgherr, the co-head of clients at Sygnum Bank shared some development on the increased interest in digital assets. According to him, digital assets are now being considered as an alternative and a way to protect against worrying and inflation risk. In the outbreak of COVID-19, there was an increase in national and international banks seeking their assistance to help B2B setup. Using the setup, clients will be able to invest in digital assets.
Major Banks have recorded significant losses. For instance, the world’s 14 largest banks have lost $635.33 billion in market capitalization since the pandemic. As the value to the dollar and other fiats kept falling, more and more people began looking for save haven.
Cryptocurrency as Alternative Investment
People are looking for ways to invest their recently increased cash at hand. But governments keep making payments to individuals and businesses alike. Small businesses began accepting crypto to adopt. Regulators also began to implement different processes to create regulations for the market. In 2020, Bitcoin’s price has gone as high as $13,860, Ethereum $1098, and Bitcoin Cash $490. Bitcoin experts also predicted that the prices of these currencies’ will shoot higher before the end of this year.
Taimur Baig, a respected multinational bank and its chief economist,
“Pre-pandemic crypto demand was largely speculative. Many saw bitcoin as a spectacular run and wanted to be part of that game. So what is wrong with putting in 1% of assets under management [into BTC]. But I think post-pandemic is beyond speculative. It’s more about, this thing that has fixed circulation, it will not be debased. People are worried about dollar outflow and wondering if they should hold crypto in addition to gold as a safe-haven currency.”
Recently, regulators in the United States authorized banks to provide custody for cryptocurrencies. This was seen as a move to bring Bitcoin and other cryptocurrencies into the mainstream. Other companies like MicroStrategy have moved a large sum of their cash reserves to invest in Bitcoin. They claim that the currency was a “dependable store of value and an attractive investment asset.” The U.S Department of Justice (DOJ) recently issued a legal framework for Bitcoin and other cryptocurrencies. The state of Wyoming is also working to becoming a crypto-friendly space.
In May, JPMorgan, the largest retail bank in America, announced it had started processing crypto transactions on its platforms. It also has plans to create JPM Coin, a digital currency tied to the dollar. In June, PayPal and Venmo announced their intent to venture into the cryptocurrency space.
While researching the recent crypto growth, the Tokenist explained:
“With over 20 million people in America currently unemployed, the public narrative towards Bitcoin has changed. The results are striking. We found increased knowledge of, and growing confidence in, Bitcoin among all age and gender groups surveyed. This effect was most pronounced in millennial respondents, 45% of whom would now preferentially invest in Bitcoin overstocks, real estate, and gold.”
Even in the midst of the pandemic, the crypto market had seen growth instead of death. The emergence of various DeFi projects, the predicted bitcoin bullish and a lot more says a lot. There is nothing that can stop the crypto market from growing and gaining support from investors, not even a pandemic.