For the last year, it is easy to feel as if you have woken up amid a new, scary nightmare. A world where a confusing virus arrives globally and forces most of the populace indoors for months at a time. A virus where the damage of the virus is as damaging as the mass misinformation campaigns ran across independent media and beyond. This has left many people, particularly those with a passion for investment, short of options. It does, though, mean that COVID-19 has had a profound impact on pretty much every market – including Bitcoin and cryptocurrency at large.
How, though, has COVID-19 changed Bitcoin?
A return to irrational assumptions
One of the biggest doubts that is placed on cryptocurrency by sceptics is the fact that it changes value at such dramatic speeds. Well, early in 2020, we seen Bitcoin fall below a price of around $4,000. This left many people to make the same old conclusions: that cryptocurrency cannot be relied upon to retain a strong value, and that it is artificially inflated. This is incorrect, but shows we are heading back to a period where irrational assumptions are made regarding the currency.
New ways to get involved
However, the fact that some have gotten cold feet and jumped out means that there is ample opportunity for others to get started. Through tools such as Crypto Hopper, it has become possible for newbies who might not have seen Bitcoin as accessible might jump in with both feet.
An affordable entry price paired with the fact that COVID-19 has seen so many get out the market means that, for the first time in a long time, COVID-19 might actually be something that you could push towards as a long-term investment vehicle for yourself moving forward.
A serious issue that has been shown up during the COVID-19 crisis, though, is the sheer amount of inefficiency within the industry. Today, though, this inefficient nature is being exposed in kind due to the impact COVID-19 has had.
Those who are running poorly managed and inefficient operations when it comes to mining, for example, will have to reform or shut down. It will, though, be a good thing in the long run: COVID-19 is forcing people to look closer at the risks they face, making it easier to work out how to become more efficient in future.
With the Supreme Court deciding to lift a ban on cryptocurrencies in India, there is a pretty staggering increase in the liquidity of Bitcoin. This is expected to continue in the near future, but it is not possible to expect Bitcoin to be matching what other investment opportunities, such as stocks in a company, can provide to a normal investor.
However, for years one of the major marks against Bitcoin and cryptocurrency has been the lack of liquidity. This is changing, though, and it could mean that in the future we see cryptocurrency become a more natural choice as a primary investment vehicle for those who are used to more traditional investment.