Our ride with Bitcoin has been a wild one, don’t you agree? Well, if you are aware of all the rise and fall of this digital currency in the last decade, you know what we are talking about. It had both a skyrocketing rise of value and huge downdrafts. The latest, and one of the biggest declines in the short history of Bitcoin, is occurring before our very eyes. Yes, we are talking about the global coronavirus pandemic that is keeping us in our homes and the economy that has stopped growing for a month or so. Since we don’t have the knowledge when this pandemic is going to end, only one thing is certain, this is going to be a huge downfall for Bitcoin and its value.
In March 2023, Bitcoin suffered one of the worst periods ever. Its value has fallen from $7,600 to $5,300 per coin. Only a few days after this plunge, the worth was around $4,000. There is nothing strange about this fact if you didn’t know that the price of Bitcoin was around $10,000 in the middle of February. Thankfully, we have seen slight changes in the last couple of days, and today’s worth of Bitcoin is around $7,000 again. However, this doesn’t provide any guarantee that it will stay like that and that the worth will not continue to decline again in the future. The one thing we are certain is that this pandemic proved to be pretty unpredictable and that we are not sure what we can expect in the next couple of days or weeks.
The main issue with this decline of the value is that the global economy stopped. Therefore, you can be sure that there wasn’t anything wrong with your investment. If you would like to learn about common mistakes made by investors, check livebitcoinnews.com. Now we are going to talk about whether it is a good time to invest in this digital currency during this global pandemic and, in the end, we are going to provide you with the answer. We are going to take a look at multiple events that could have served as the fuel for the rise of the Bitcoin value, but have failed in the process. Stay with us if you would like to know the answer.
Higher Demand for Digital Payments
The global pandemic is likely to increase the tempo of adapting some new trends when it comes to value exchange. The main reason for this is that the World Health Organization encourages people to use as many contactless payments to help reduce the spread of this dangerous virus. Also, central banks in a couple of nations even quarantined their physical money for a period of two weeks before releasing it back into the circulation.
Independently from the store of value, the Bitcoin was designed as a “peer-to-peer e-cash system”. No one thought that digital currencies would be perfect for these kinds of occurrences. But this is not entirely true. The current problems that Bitcoin is facing are making it pretty unusable as a payment network. There are some new technologies that can help in this regard. However, they are not ready for mass adoption yet. The conclusion is that when it comes to the need for digital payments, it is unlikely that the value of bitcoin is not likely to go up soon.
Stock Market Turmoil
This global pandemic unleashed nothing short of a wave of fear on the global financial markets. Businesses and schools are closed, travels are banned, and quarantines are introduced to help the decline of the virus. Investors are scared to invest their money since all economies in the world are now stopped producing and working. Since there is no investing, markets around the world are facing some sharp losses.
When you look at previous market distresses, Bitcoin performed really well. People see Bitcoin as a chance to preserve and increase their wealth while all other possibilities are not an option. This time, the value of Bitcoin followed the decline along with the world financial markets, even though it’s entirely independent of them. It is strange, but it happened.
In order to prevent the complete decline of the world market, central banks of the most powerful countries in the world pumped up some liquidity into the markets. Even though these measures have the potential to improve the stimulation of the economies around the world, they are also likely to influence the decline of the US dollar and other important currencies. The reason for this is that they are going to increase the amount of money available on the market. The predictions are not good. In many ways, this is exactly why was Bitcoin invented in the first place.
This digital currency has a hard cap on the total supply of around 21 million coins. It looks like Bitcoin is going to preserve some of its value, while other currencies are going to be faced with a continuous drop in the future. So far, the stimulus measures of central banks have a little influence on the value of Bitcoin, and it is pretty unclear if they will have an increased influence in the future. We are going to just wait out and see how this situation resolves itself. At the same time, we don’t have any doubt that the world financial experts are going to find a solution or a couple of them.
Should you Invest in Bitcoin During Coronavirus Pandemic?
We’ve named all of these reasons and our opinion is that it is the best decision to wait out a little bit when it comes to investing your money into Bitcoin. Since this is not the hottest topic when it comes to Bitcoin as a method of payment, we feel that this is not a good time to invest your money into this digital currency, or any for that matter. There are several signs that the situation is going to improve in the future. We’ve already witnessed halving the Bitcoin value as a measure that will have an effect on the future value of this digital value. We don’t have any doubt that Bitcoin has a bright future, but this is not the time to invest in it.