Many activities around the world were abruptly halted as a result of the COVID-19 pandemic. Businesses, offices and business travel were forced to take an extended break to curb further spread of the coronavirus. The European, Chinese, Indian, and the United States stock exchanges also felt the impact of the virus. The value of precious metals, including gold, platinum, and silver were all affected in unique ways.
There was a massive rise in the value of gold sometime in May 2020 as it rose as high as $1,700 before experiencing a subsequent decline. However, unlike gold and other traditional commodities, platinum and silver continued to rise in value despite the influence of the COVID-19 pandemic on the market. This is the reason that experts are now advising investors to switch from investing in gold to investing in platinum and silver.
The economies of countries around the world have been heavily impacted by COVID-19 pandemic. With major currencies such as the US dollar, pound sterling, and the euro dropping significantly in value, investors are constantly on the lookout for safer options for saving and investing their money. Could the COVID-19 pandemic be the perfect opportunity for cryptocurrency to catch up with fiat currencies?
THE IMPACT OF THE COVID-19 PANDEMIC ON CRYPTOCURRENCY
While many traditional commodities and fiat currencies are experiencing a decline in value amid the COVID-19 pandemic, Bitcoin, and other cryptocurrencies such as Ethereum have been experiencing the opposite effect. Initially, there was a significant drop in the value of Bitcoin from over $10,000 in February, to approximately $4990 in mid-March. However, the value of Bitcoin has risen incredibly and maintained a stable value in recent months. You can find more information about crypto assets on the NakitCoins homepage.
The impact of the COVID-19 pandemic on traditional commodities and fiat currencies poses the perfect opportunity to invest in cryptocurrency. As the USD and other strong fiat currencies continue to drop in value, investors are turning to cryptocurrency as an alternative and safer way to save and invest their funds. Experts believe that this recent attraction can only mean that cryptocurrency will continue rising in value.
Experts and miners also believe that Bitcoin Halving is another factor that can cause instability in the value of Bitcoin. This factor is said to take place whenever 210,000 bitcoin blocks are mined, or every 4 years. The Halving of Bitcoin is a reward system created for Bitcoin miners that mine up to 210,000 blocks. They are often rewarded with 25 BTC whenever they mine their first 210,000 blocks and 50 BTC for the subsequent 210,000 blocks.
The cryptocurrency world had to devise a means to maintain the value of 21 million Bitcoin since it wasn’t expected that the last one would be mined until the year 2140. Hence, the instability in the value of Bitcoin that takes place during halving is the cryptocurrency world’s way of modifying the overall value of Bitcoin to maintain the value it was designed to host.
While the COVID-19 pandemic may have been responsible for the drop in the value of traditional commodities and fiat currencies, evidence shows that it has in no way affected cryptocurrency negatively. Hence, making trading crypto assets one of the safest forms of investment in the world at the moment.