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The ripple effect caused by covid 19 has not only impacted several sectors of the economy across the World but also watered down the value of Bitcoin. Before covid 19 hit the World, the value of Bitcoin had been increasing at an alarming speed.
The pandemic has hurt FinTech firms and the crypto trading market. In fact, the price of Bitcoin went down sharply to below $4000 in Match 2021. The price decline is attributed to a sudden slide to liquidity.
To bridge the gap, Bitcoin investors were forced to liquidate Bitcoin to cash to bridge the existing gap. Though the price has steadily gone up to $7000, it is likely to take a while before the price of BTC fully goes back to normal.
Uncertainty brought about by covid appears to paint a gloomy picture in the crypto World. Coupled by halving of mined BTC, inefficient miners are likely to feel the impact felt in the price due to the high cost incurred in BTC mining. So what’s the future of BTC in the wake of covid 19? We put all that into perspective.
Post COVID-19 expectations
Various reports predict a sharp rise in the price of Bitcoin. This is attributed to covid 19 containment measures that have driven most people to work online. Though an upward price trajectory is likely to be experienced, the value of BTC remains unpredictable.
The effects of the pandemic have had a hard-hitting effect on the value of BTC. This came at a time when the crypto industry was grappling with rampant cases of scam and regulation issues. Though is regarded as a mainstream currency, most sectors are yet to fully embrace it as a mode of transaction.
Uncertainty in the value of BTC
Despite being dogged by high volatility and an unpredictable future, the pandemic happens to have added misery to the future of an already tainted image of the crypto World. Most investors are still skeptical about fully embracing BTC as a credible mode of payment.
In fact, some countries have banned BTC transactions for fear of losing value. Be that as it may, crypto experts predict better performance should the tide brought by covid 19 settles.
Investors shun equities
The sad fact that has highly impacted the crypto sector is that most investors are no longer interested in inequities. The tough economic times have sent most investors going for liquid assets to caution them from the effects of covid 19.
The liquid aspects make BTC more attractive to most investors. Though popular exchange platforms continue to experience growth in the number of users exchanging BTC for other assets, the exchange volumes have been dropping drastically over since covid 19 set in.
BTC instability
The instability of cryptocurrencies is confirmed through the sharp drop in the price of BTC in the covid era. As fiat currencies remain stable in withstanding the harsh economic times, BTC is worst hit by the prevailing tough economic times. This paints a gloomy picture among investors who have been skeptical about investing in BTC. The slowdown in economic activities means low purchasing power. You can visit Bitcoin Era for starting bitcoin trading.
The result is that most new traders who had bought and withheld BTC to sell when the price goes up are likely to incur losses. Should the trend continue for a while then most traders are likely to abandon BTC trading.
The worst-case scenario is that those who may have invested heavily in BTC are likely to lose whole or part of their investment. With the trend appearing unpredictable, the value of BTC seems to be headed to limbo for the longest time.
Final thoughts
Just like other sectors across the World, the ripple effect caused by covid 19 in the crypt ecosystem can not be underscored. Unless various nations roll out measures to alleviate the effects of the pandemic, the future of BTC will be threatened by the impact it’s causing on the economy.
Though new investors may be scared to invest in BTC following the drop in value, the scarcity associated with Bitcoin is likely to help in creating a shortage in demand and supply and eventually lead to a spike in the price.
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This content is brought to you by Jean Nichols.
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