All of us have a fresh memory of the circumstances we faced in the pandemic. Economies around the globe have not yet entirely recovered from the shock. The pandemic affected almost every sector, including all types of financial products. The stocks, different assets and commodity markets, and the crypto market were affected equally. But, despite the severe turbulence due to the pandemic, the bitcoin market was not as affected as others.
Bitcoin has a similar feature to fiat currency as it stores value and can offer forecasts on long-term gains. If you look at the previous data, you will come across the year-on-year appreciation of bitcoin. The currency has seen steady growth despite the pandemic, and we will try to know the reason.
The regulatory actions
Many businesses and markets have already shifted towards using bitcoin. Businesses worldwide are now accepting bitcoin as part of the payment. One of the most significant examples is how Costa Rica announced that employees would get their monthly payments in cryptocurrencies. Thus, the adoption of cryptocurrencies, especially bitcoin, has certainly spiked.
Another best example is related to the Philippines. The country is championing the use of bitcoin. Last year, the Central Bank in the Philippines announced that the country would come up with almost sixteen exchanges for cryptocurrency. Thus, we can see a significant shift as the country accepts the booming bitcoin technology with open arms.
The move towards digital
With the rise in pandemic and more people staying at home, people prefer digital payment. As per a report, in the second part of 2020, digital payments grew 82%. Even after the unlock phase, people kept using digital payment methods. Thus, the central Bank globally has taken actions to include digital currencies. However, at this moment, the complete rollout of a virtual currency is not applicable. Thus, central banks have used digital currency as an alternative payment method.
Many countries have started looking for a digitized form of their fiat currencies. These digitized currencies are also backed by their monetary authorities. China is one of the most significant examples of countries digitizing its currency Yuan.
As per a Bank of international settlement survey based in Switzerland, China is not the only country doing so. Almost 80% of central banks globally are experimenting with this concept. While many countries have not revealed their strategy yet, western nations like Canada and England have a full-proof plan for digitizing their currency.
Increase in economic activities
We all know that cryptocurrencies like Bitcoin are not ancient. We have known bitcoin just for a decade. But, the way it is growing is mind-boggling. A separate innovative system is specially designed for bitcoin and the surrounding ecosystem. Many big businesses and industries have already taken the plunge into the bitcoin ecosystem. The biggest reason behind this is that bitcoin offers protection against inflation.
Banks that were not ready to say a word about bitcoin are now looking for avenues and opportunities to use cryptocurrency and the associated technology.
Currently, we are in a world where almost two-thirds of the population lacks access to essential banking services. Thus, people don’t have ways and means to get loans or build their savings. We hear stories of dangerous landings and how poor people are fooled every day, with the coming up of cryptocurrency in the main picture. However, the financial situation of these people can improve in the long run. The ease of use and high levels of volatility presents significant opportunities for even wealthy sections to increase their wealth.
As we return to the new normal after the demonic pandemic, we are looking at the great opportunity by bitcoins. If you are new to this new world, you might be thrilled. People who were earlier sceptical of digital currencies are now making the right choices. No doubt, like all other currencies, bitcoin may also have to face a crisis. But, in the long run, bitcoin will sustain itself. The digital currency has proved to be resilient, and it has faced the greatest crisis in the world. We hope the article helped you in gaining enough insights. Inform us if you need further details. You can search the term bitcoin and bitcoin gold to know more.