Not many people know this, but bitcoin came into existence in 2008 as a response to the significant economic crisis. Thus, no point explains that bitcoin is a stranger to uncertainty. Bitcoin as a currency is aware of challenges related to fluctuating markets. If you want to know about the volatility aspect of bitcoin, you can check how to deal with fomo while trading .
We all saw how bitcoin got a significant hit in 2020. The entire world was facing an economic slowdown due to the pandemic. But, bitcoin saw a hit. The informative article informs you about how bitcoin handled the challenge.
While other currencies have seen a fall in value, bitcoin has rallied, becoming substantial. Digital currency has become so strong that people are comparing it to gold.
Is bitcoin a haven?
Many investors are calling bitcoin to be a haven asset. It means that the currency works well, even in the case of volatility. Gold is another essential asset that offers a haven investment. Gold retains value even when the market doesn’t perform well. Thus, as an investor, you won’t be at risk of losing money even if the market fluctuates frequently.
But, currently, bitcoin has not reached the status of a haven asset. Instead, the worth of each bitcoin rests on the level of consumer’s confidence. In the initial phase of the pandemic, bitcoin saw a massive drop in value, but it regained its value soon after.
Easy investment avenue
When the pandemic compelled all of us to stay at home, we wanted to invest right at the comfort of our couch. In this sense, bitcoin has lots of advantages. After the pandemic, people are getting comfortable with the way bitcoin is traded with ease. The growing demand for digital currency also compels people to make a quick and wise investment decisions.
A shift in the digital world
The coronavirus pandemic has caused a significant shift all around us. We have changed a lot from going to work to purchase our groceries online last year. The trend towards digital currency was already witnessing a significant boost in the pre-pandemic period. But, the Covid-19 pandemic accelerated the way people made transactions in bitcoin and other cryptocurrencies.
As people made adjustments towards shifting to digital currency, the popularity of bitcoin gained traction. Moreover, trading and investing in bitcoin is an easy task as all you need is an internet connection. Thus, the shift towards digitalization has certainly favoured bitcoin investment.
New and improved technology
As the demand for digital currencies rose, there was the arrival of many new technologies. People and companies all over the world came up with innovative technology. Initially, there were concerns that bitcoin leads to carbon emission and pollution. But these things are past now.
Many new engineers have come up with new solutions and green solutions for the sustainable mining of bitcoin. For example, today, solar power and hydroelectricity are used for bitcoin investment. Thus, in comparison to the mining of gold, bitcoin mining is undoubtedly a sustainable option. Furthermore, 21 million bitcoins will get launched in the market and mined. Thus, this is a great advantage associated with bitcoin.
The fall of traditional banking
You may not know this, but many traditional banks are shutting down their old working method. People are now looking for better and innovative financing options. Thus, people are trying to avoid brick and mortar banks. In addition, many nationalized banks and financial institutions worldwide have launched their virtual currencies. Thus, instead of fiat currency, people are shifting towards cryptocurrency.
People are attracted to this model since you don’t need a regular bank account to trade in bitcoin. People in unbanked areas worldwide can easily switch to cryptocurrencies like bitcoin. Many people faced financial difficulties at the time of the pandemic. Therefore, people are gravitating to the decentralized form of investment.
Bitcoin has undoubtedly faced the test of time, and it continues to do so. The growth of bitcoin has not slowed down. The only major drawback is the volatility associated with bitcoin. The most crucial part is that consumer behaviour has changed after the pandemic, favouring bitcoin. We can’t say that the gold has lost its shine, but bitcoin has undoubtedly seen a significant boost.