The coronavirus has caused disruptions to industries around the world. People die from widespread infection and other complications. Those who have survived the pandemic so far have yet to completely escape harm. Everyone has been affected by this pandemic for the worse. However, the pandemic has also proven to be a boon for some industries. The online retail industry has experienced exponential growth during lockdowns. Another industry affected by the pandemic is the cryptocurrency industry. Cryptocurrency trading has been affected by the same. Let’s dive into the topic and analyze the effects of Coronavirus on Crypto trading during https: /immediate-edge.co.
The boom in the cryptocurrency industry
While there are no theoretical claims linking the pandemic to the boom in the crypto industry directly, observations point to this. Since the beginning of the pandemic, the value of Bitcoin has risen from $7,300 to $46,800. This equates to a 640% increase in value. However, one important factor that can be attributed to this contribution is the inflation resistance that cryptocurrencies have shown. Investors fear losing money due to inflation and other economic failures. However, investing in a profitable currency can help to overcome this problem, while also helping you to make a profit. It was further noted that the fluctuations occurring in the cryptocurrency market allowed more people to enter the cryptocurrency trading industry. The crash of the cryptocurrency market occurred on the 8th of March 2020 due to the massive sale of cryptocurrencies. This was followed by a drop in cryptocurrency rates. Investors saw this as an opportunity to increase investment in the cryptocurrency industry. Hence, cryptocurrency trading has grown largely due to the market crash during the lockdown.
Relationships between the rising cases of Covid19 and the total market capitalization of the cryptocurrency industry
Preliminary observations indicate that a positive correlation has been found between the number of new cases found each day and the total market value of the industry. However, the prolonged exposure to the pandemic and lockdown has made the cryptocurrency industry act differently, with a “U” graph noted. This can be attributed to the fact that people were initially terrified. This has led to heavy investment in the cryptocurrency industry which has seen many new investors take money from traditional investments and put it into the crypto industry. However, as market dynamics became more evident, people started to return to traditional investment methods.
Cryptocurrency trading platforms and their growth
Cryptocurrency trading platforms allow us to buy/sell cryptocurrencies whenever we want to. Trading platforms like WazirX and Coinswitchkuber made a lot of profits and boosted their value throughout the year. Thus, it can be said that the impact of the pandemic on cryptocurrency exchanges has been positive. It has been implied from the above points, that the crypto market is not just a fad and is a legitimate source of income for investors. Initial skepticism has now turned into a firm belief in the cryptocurrency industry.
Cryptocurrency mining occupies a large share in the cryptocurrency market
Cryptocurrency trading experienced a further boom before the growth of the mining industry. More investors are investing in crypto-mining hardware in countries that support cryptocurrency. Many governments have taken a tough stance against cryptocurrencies after the outbreak of the pandemic, due to the growing cases of fraud and liquidation. However, countries like the USA support cryptocurrency mining and trading. China has seen a major shift in this regard, with the Chinese government leading a massive crackdown on miners in the country. All these aspects have had a positive impact on cryptocurrency trading.
Although there is no concrete evidence to support the connection between the increases in new Covid cases, one can note that the crypto industry has grown exponentially. Several factors that can be attributed to this growth have been explained. However, the attitude of governments around the world can change rapidly and lead to losses on investments. Thus, one can mention that the positive and negative effects of the Corona virus have been observed on cryptocurrency trading. Investors can incur huge losses if these aspects are not properly researched.