Covid-19 VS Bitcoin
Coronavirus (Covid-19) has spread rapidly around the world with cases reported in almost every country. This has induced many countries to shut down and has triggered a surge of interest in digital assets such as Bitcoin. Stock markets all over the world lost trillions of dollars in value in just a matter of a few hours. The stock market has responded to the pandemic with much uncertainty, as traders have panic sold out of fear. Due to the recent turmoil, the “market wide circuit breakers” that attempt to prevent panic trading have been triggered four times in March. The last time they were triggered was once in 1997. A global recession of record proportions is a near certainty.
However, in spite of all this, I see some opportunities. In Mid March, cryptocurrencies were declining along with the stocks, Bitcoins price nearly halved from USD 10,000 to about USD 5,000. However, a few days after the announcement of emergency measures by the Federal Reserve, cryptocurrency exchange rates begun to grow, with BTC pricing at over USD 6,000. This was most probably due to fear of the US Dollar devaluing after the Federal Reserve’s announcement. It is not clear yet if crypto’s recovery is going to last, but if the stable positive trend continues it is quite likely to be established by April.
Bitcoin Halving is set to happen around 18th May 2020. The halving is next month and miners are already closing up “shop”. So at the time of the halving everything may be much different from previous halving events. But many forget the several factors that are working for Bitcoin, not against it. Firstly Bitcoin prices have improved already, as i have mentioned before. Secondly the lock down is making people look more into digital currencies. In the long term, the coronavirus will ease off. Already in China the virus seems to be decreasing and once the western world follows, the world as we know it will never be “normal” again. With the halving and excess cash on the market, lots of people will consider crypto as an alternative asset to protect from future inflation.
Most people will realize that dealing with crypto is much easier than traditional banking methods. It has begun to happen already and Bitcoin is the first place they’d make a stop at, as Bitcoin is the biggest cryptocurrency that currently dominates over 40% of the market. I believe that the halving will follow previous trends by reaching an all time high. But it all depends on how the crypto market will respond after the halving.
Bitcoin’s leap towards the mainstream due to Pandemic
Having banned cryptocurrencies, or having refused to view them as money in the past, many countries have begun to recognize them in their financial laws and courts.
Malaysia’s Securities Commission has given full authority to a crypto exchange operator to operate in the country legally due to the covid-19 crisis. Despite the lock down crypto exchange operator Tokenize Malaysia was given a go ahead to operate a digital asset exchange (DAX). The country believes that the digital asset industry is one of the best equip as the industry is used to working, managing teams remotely and communicating effectively across time zones.
In February a French court had pronounced that a loan involving Bitcoin was a consumer loan, meaning that Bitcoin is now placed in the same bracket as money and other financial assets. A few days later the financial services regulator in Abu Dhabi had updated its virtual asset legislation to align with FATF standards. South Korea’s lawmakers, India and Germany’s financial regulator shortly followed suit. Finally, on March 16 Zimbabwe had announced that it is developing a regulatory framework for cryptocurrencies that will allow firms to be compliant with the countries financial regulations therefore allowed to do business with banks. This too reversing a 2018 ban on banks transacting with crypto firms.
Blockchain Based Decentralized Digital Court
Blockchain technology is slowly gaining traction as two researchers, Professor Shunya Noda and Professor Hitoshi Matsushima form the University of Tokyo have revealed a “digital court” implemented on a blockchain network. The system will provide all the functions a physical court does, a platform where judgment and legal disputes are all carried out. Due to the pandemic the Blockchain technology has grown rapidly and has entered a variety of industries, bringing benefits such as reduced costs, transparency, the elimination of unnecessary authoritative entity.
Charities Turning Toward Bitcoin
Cryptocurrencies are emerging as a much-needed tool for fundraising projects and charities. Many non-profit organizations are accepting Bitcoin donations. Crypto and Blockchain firms are aimed at helping Covid-19 victims by contributing medical supplies to hospitals. Charities are realizing that crypto transactions reduce costs in terms of fees. Here are a number of fundraisers and charities accepting crypto:
- Red Cross
- Houbi Charity
- Krypital Group
- Binance Charity Foundation
- The Water Project
- Save The Children
- Field Ready
- No Kid Hungry
- The Giving Block
- United Way Worldwide
- Waves Charity Campaign
Blockchain Overtakes Payments Among Major Corporations
Multi billion companies are much more likely to use blockchain technology for provenance and trace ability. Companies with Blockchain trace ability solutions include BMW, Mastercard, Amazon, Nestle and Walmart. At the same time, on the list of newcomers include the UN and the worlds second largest bank China Construction Bank. Blockchain started as a way to move Bitcoin from one point to another, now it is being used by large companies to move and monitor assets around the world.
After the American 2 trillion stimulus package, the crypto community reacted with a combination of Astonishment and celebration at the nuclear bomb tossed at the US Economy. They are pumping Bitcoin, it is time to change your fiat currency into BTC. There is no way your dollars can keep their value after pumping $1.5 Trillion so far into the system.
The debasement of fiat currencies, mobilization of trillions of dollars of dept, this is the time for Bitcoin. If by the end of the year Bitcoin is not higher, we will all be starstruck, our heads in total disbelief. Some have questioned as to why the price has not reacted more quickly to this stimulus. These changes take time to propagate in the economy, and I personally believe that Bitcoin will show its strong hand in the not too distant future. Time will tell.