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How Bitcoin Is Handling The Challenges Of The COVID-19 Pandemic

How Bitcoin Is Handling The Challenges Of The COVID-19 Pandemic

by Culture Liverpool

Bitcoin was created as a response to the 2008 financial crisis making it no stranger to the world of uncertainty, low employment rates and fluctuating markets. As with all types of assets, Bitcoin experienced a hit in performance in March 2020 due to the financial impact of the COVID-19 pandemic going global.

The difference with Bitcoin is that it has rallied and become a much stronger investment than ever before. Gold is the asset that many think of when it comes to maintaining value, but bitcoin is now truly becoming a challenger to gold in this respect.

Safe Haven Asset

Bitcoin is rapidly becoming what is known as a safe haven asset – an asset that performs well even in volatile markets. Gold is the classic example of a safe haven asset, as it retains its value even when the markets are performing poorly. Any investor will know that their money will be safe invested in gold no matter the fluctuations in the market.

Bitcoin has struggled to reach the status as a safe haven asset. Where stocks and cash are often backed by gold, bitcoin’s value is based on consumer confidence. While initially during the coronavirus pandemic Bitcoin saw a drop in value it has since recovered to record prices.

Ease Of Investment

The coronavirus pandemic has led to an increase in people wanting to invest easily from home. Bitcoin has always had the advantage of being entirely digital.

It is easier than ever to buy Bitcoin, thanks in part to the pandemic. For the first time, many people see the advantages of investing in Bitcoin and Bitcoin marketplaces are rising to meet the challenge of growing demand. Paxful is one of the leading Bitcoin marketplaces. With a wealth of experience in the cryptocurrency market, they have quickly become one of the top global businesses to buy and sell Bitcoin.

A Shift To The Digital World

The coronavirus pandemic has caused a large shift towards the digital world in all areas of our lives – from working from home to ordering groceries online. This was already a growing trend before the pandemic, but COVID-19 has accelerated the rate that businesses and individuals are using digital infrastructure.

Remote financial services are more popular than ever, and cryptocurrencies are becoming ever more popular as people adjust to the digital world. All you need is an internet connection to buy and sell Bitcoin, making it the perfect vehicle for businesses and individuals who want to make quick, easy international transactions.

Improvements In Cryptocurrency Technology

With the increased demand for cryptocurrency has come increased innovation in technology for supporting currencies like Bitcoin.

The concern of many potential Bitcoin users is the sustainability of Bitcoin. It has been estimated that mining Bitcoin generates as many carbon emissions as the entire country of Sri Lanka. As more and more people shift to cryptocurrencies this worrying level of carbon emissions is becoming a thing of the past.

Engineers have been coming up with green solutions for mining Bitcoin steadily over the past two years, and there are now many more sustainable options for mining Bitcoin. This includes solar-powered and hydroelectric Bitcoin mining. In a world where climate change has become one of the most critical issues for most businesses and individuals, Bitcoin technologies are leading the charge to renewable, responsible energy.

The Decline Of Traditional Banking

With banks forced to shut their doors for large swathes of 2020, the steady decline of traditional banking methods has begun to speed up.

People want more innovative financing options, and more and more brick and mortar banks are not rising to the task. While several central banks have unveiled plans for their own digital currencies, it is cryptocurrencies like Bitcoin that most consumers are now turning to.

Given that you don’t need a bank account to buy and sell Bitcoin, it is perfect for those that are underserved by their banks or who don’t have a bank account. Given the financial difficulties that many people have faced since the start of the COVID-19 pandemic, it is no wonder that people are now gravitating towards a decentralized form of keeping and moving money.

Conclusion

Bitcoin has mostly weathered the storm of the COVID-19 pandemic. Whether it continues to do so remains to be seen, but its growth shows no signs of slowing down yet. The volatile nature of the cryptocurrency market makes it hard to know how long the uptick in value Bitcoin has seen will last.

What is certain is that consumers’ behavior has changed significantly due to the pandemic – a change that is unlikely to go anywhere soon. With the shift to the digital world only gathering pace, it is likely that Bitcoin will continue to continue becoming more and more mainstream.

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