Cryptocurrency during the Coronavirus Outbreak

  • 9 months   ago

In the middle of February Bitcoin was trading at $10,000, less than a month later Bitcoin value had fallen to just below $4,000, losing over half of its value. Even for a notoriously volatile currency such as Bitcoin that was a dramatic fall in price.

The global Coronavirus pandemic was cited as the reason for Bitcoin’s plummeting price, with investors seemingly reverting to the safety net offered by traditional cash. The initial shock caused by Covid-19 seems to have stabilised somewhat with the price of Bitcoin on the rise again.

Despite that, many questions still remain unanswered by cryptocurrency investors. How long will the current uncertainty last? Should you be selling Bitcoin now or holding on to it? Read on to find out the answers to all these questions and more.




What was the state of Bitcoin prior to the Pandemic?

Bitcoin has been in circulation for over a decade. For most of that time period it was something that was enjoyed by a small group of people, and was never taken seriously by big financial investors.

However in 2017 the cryptocurrency rose to the fore when more and more people began investing. The price of Bitcoin rose to a peak of $17,900 in December 2017 sparking a previously unheard of global interest in the currency.

In the preceding years Bitcoin became a source of interest for investors and its use in everyday transactions grew. Prior to the Covid-19 outbreak, Bitcoin and other cryptocurrencies were just a standard fixture of normal life.

Why has Bitcoin crashed?

To understand the economy it is first necessary to understand human psychology, as after all humans are what drives an economy. Essentially as a species we are greedy and skittish, which is why our economy is always in a state of flux.

When people start to make money from something, others flock to that product, thus raising its price, which is what happened in 2017 with Bitcoin. Conversely, when people are anxious they panic and seek to protect themselves, which is why Bitcoin’s price plummeted last month.

Whilst Covid-19 was spreading around the globe at a phenomenal rate, media companies were busy spreading fears of a global recession that would completely eclipse the crash of 2008.

The market panicked, which was reflected in falling share prices across the globe as anxious investors sought to protect themselves by selling their shares and putting their trust in traditional currencies.

In short, that is why Bitcoin has crashed in price. It is nothing new and nothing to be scared of, in fact it is something that will routinely happen in the future.

Should I Invest In Bitcoin?

Yes. That is the simple answer and that is what anyone with even a high school understanding of the economy will tell you.

People are panicking right now and as such they will be more inclined to accept lower prices for their assets. There is no better time to make money than during a global recession, and the Covid-19 pandemic is no different.

Whilst the price of the cryptocurrency may have stabilised recently, it will likely fall again as the pandemic spreads and worsens. When the price falls again, it is your opportunity to make money.

Buy it low and sell it high. Bitcoin will recover when the current pandemic passes, and when that happens the price will return to above $10,000. If you buy now whilst it is cheap, you stand to make a lot of money when the economy returns to an even keel.