Tuesday, June 25, 2024

The Impact of Covid-19 on Bitcoin – An Overview of Performance in 2020

There is no other way to say it. Bitcoin has jumped to an all-time three-year high as the COVID-19 pandemic has altered the outlook of investors. Bitcoin is the world’s most famous cryptocurrency. With aggressive Bitcoin trading, its value plummeted to $17,000 in November 2020. Investors viewed it as an alternative to other kinds of assets, growing its strength. The currency shot up more than 4%. This was its highest level since it had risen in December 2017. Experts have claimed that the pandemic compelled investors to evaluate the long-term outlook of Bitcoin as well as other cryptocurrencies. Among these others is Litecoin, Ethereum and XRP, all of which have gone up in value in the year of COVID-19. Bitcoin hits an all-time high of just under $20,000 (cnnphilippines.com)

Investor Security

With concerns over trading fraudulently in cryptocurrencies waning, investors now have a greater sense of security. A succession of hacks that created losses of millions of dollars in major cryptocurrencies had promoted fear among investors. Bitcoin trading was on a low as a consequence, as was trading in other cryptocurrency segments. Not all outcomes of the current pandemic are negative. As far as Bitcoin is concerned, the crisis brought on by the virus is forcing investors to reassess its potential as a major investment option. Investors are going as far as to consider its value as an alternative to precious metals, like gold. Bitcoin has doubled investor wealth in 2020 — and industry insiders say there’s more to come | Business Insider India.

Bitcoin set to Grow

Analysts such as Nikolaos Panigirtzoglou from JP Morgan claim that the virus is literally great for a cryptocurrency like Bitcoin. Endorsing that analysts are seriously thinking of the cryptocurrency as an option to gold investment, he says that Bitcoin trading will see only highs in the future months. Gold, in comparison, has waned in value. Some investors see Bitcoin, as they do precious metals like gold, as a safe investment haven. More aggressive traders see it as an asset that will yield growth in a period of low returns that government bonds yield right now. com/cryptocurrencies/bitcoin/Big-Investors-Are-Dumping-Gold-For-Bitcoin.html” target=”_blank”>Big Investors Are Dumping Gold For Bitcoin | SafeHaven.com.

Other Factors and Bitcoin’s Upturn

Stimulus measures from the central bank to fight the pandemic crisis have all but curbed interest rates to below zero. This is a global trend. Consequently, minimal returns have been left behind as lending options to governments. Prompting higher Bitcoin trading demand is that its supply has been capped at 21 million. Analysts say that this scarcity automatically creates an innate value in the cryptocurrency. It also protects Bitcoin from government and central bank policies that ignite inflation. Why Does the Price of Bitcoin Keep Going Up? (investopedia.com)

Investors are worried that inflation may drastically surge in 2021. Citing the reason for this, they feel the new coronavirus vaccines will rush in, allowing economies to get a boost from governments worldwide. Investors also expect that Bitcoin will be accepted by mainstream corporate firms, forging ahead as a means of widespread payment.

The Cryptocurrency Endorsement

In October 2020, companies like PayPal made an announcement that it would open its network to a few cryptocurrencies, one of which is Bitcoin. Since this move, Bitcoin trading increased, its value having risen even more. Investors at AJ Bell say that the supreme endorsement of any cryptocurrency is its value as real money use. If you can buy your groceries and other commodities with it, it will be the ultimate acceptance of its power.

With all this in mind, experts tout the cryptocurrency as a great bet for investors and traders alike in the next year, 2021. Its value as an asset is set to move to higher levels. With the cryptocurrency industry portraying some consolidation, value is showing traction. Using it as a hedge against potential inflation, investors say it’s a good safety control against stimulus packages that governments introduce.

Claire James
Claire Jameshttp://www.firedigitaluk.com
Claire is an accounts manager at Fire Digital UK, an online publishing and content marketing company based in the North West.

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