Will the acceptance of bitcoin grow due to the pandemic? - Kalkine Media

September 23, 2020 06:51 PM AEST | By Team Kalkine Media
Follow us on Google News:

Summary

  • Bitcoin, other cryptos, and digital assets have gained in popularity during the pandemic, as more people showed lesser reliance on cash.
  • Bitcoin has witnessed a significant difference in demand in the pre-COVID-19 and post-COVID-19 eras.
  • Only gold and bitcoin have shown an increase in demand since the pandemic occurred, and now there are speculations that bitcoin will replace gold as a safe haven.
  • National banks and their shares took the hardest hit as they were forced to print more money to boost the economic recovery.

As global banks suffered a massive plunge due to the coronavirus pandemic, digital assets have been categorised as attractive, as they are immune to the current business affairs.

ALSO READ: Cryptocurrency Trading on the Rise, Bitcoin Again Crosses USD 12K Mark

A quarterly report, published by the Singapore-based banking giant DBS Bank, highlighted that digital transactions are getting more popular by the day and has branded 2020 as a milestone in the history of finance.

If nothing, the pandemic has shown that consumers rely less on cash and have been more in favour of contactless and digital payments. Cryptocurrencies are getting more recognition, which could lead to increased usage in the near future.

DO READ: How is cryptocurrency going to be regulated in the EU?

These findings have increased cryptocurrency popularity, as they were claimed by a respected bank and its chief economist Taimur Baig.

Pre-COVID-19 and post-COVID-19

Bitcoin’s development can be described within two different eras: pre-COVID-19 and post-COVID-19 era.

Before the pandemic, investors saw bitcoin as an exciting asset but did not want to risk putting significant portions of their portfolio in the cryptocurrency. Its demand was speculative at best because of high volatility and a possibility to burst like a bubble.

INTERESTING READ: What advice to follow before purchasing bitcoin and other cryptocurrencies?

On the other hand, bitcoin demonstrated significant advantages compared to fiat currencies, such as its fixed rate that will likely reach its end by 2140 and decentralised network that is not connected to any central bank.

DO READ: Bitcoin for Beginners: 5 things you need to know

Among other cryptocurrencies, bitcoin remained strong and became even more valuable during these unprecedented times. Compared to fiat currencies that have been inflating ever since, investors are putting serious thought into moving their assets to bitcoin, while holding on to the gold investments. This comes as no surprise because gold has held the title of a safe haven for ages.

DID YOU READ: Bitcoin vs Gold: Can the cryptocurrency replace the oldest safe haven?

Promising future?

Some famous investors and several overseas banks have contributed to the rising popularity of bitcoin. One of the high-profile investors that moved a portion of his portfolio to bitcoin is Paul Tudor Jones, instantly providing bitcoin with more acceptance and trust.

Constant technological improvements and privacy that blockchain technology offers will most likely be two of the key reasons for future investments in cryptocurrencies. That is probably why the DBS research group believes that bitcoin and other cryptocurrencies are here to stay.

ALSO READ: How has COVID-19 affected bitcoin price?

Who took the hardest hit?

Unlike cryptocurrencies that are virtually resistant to government intervention, banks do not share the same feature. The KGW Nasdaq Index share has taken a 33% plunge because of huge losses that banks had experienced. The only stocks that were some-how doing well were those from the US.

Luckily for bitcoin and cryptos, inflation, that happened due to the printing of more money, has pushed investors to look for a new way of storing their wealth. Now, only the future will tell if that was a smart thing to do.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.



Top ASX Listed Companies

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK