There is no denying the world was rattled with the international pandemic, and sadly Bitcoin was not left unscathed. As the Coronavirus swept its way through international boundaries, countries were sent into unprecedented lockdowns, with many thrown into recessions in the wake. While some countries experienced relative calm heading back to “normalness”, many are being thrown into a second wave of restrictions. leaving many to wonder, will a second wave of Coronavirus lockdowns impact Bitcoin?
Bitcoin Vs The Pandemic
While initially the OG cryptocurrency was influenced by the crash of traditional markets like the US dollar, it tested some resistance and has since fared well against the pandemic’s destruction. Trading at a low $5,000 in March, Bitcoin has done well to redeem itself, even reaching a year-to-date high of $12,000 in August.
As a response to the growing unemployment and rising government debt, the US issued stimulus checks equating to $3 trillion to its qualifying citizens. This led to an unlikely rise in Bitcoin purchases on Coinbase, with many either looking to make a worthy investment, or perhaps move their money to a more stable market.
As investors were plagued with declining fiat currencies and declining stock markets, many turned to unlikely “safe haven” assets like Bitcoin and gold. Fueling the price of both these markets, Bitcoin appears to have survived the wreckage of the pandemic. But with countries around the world experiencing unsuspected second waves, experts are torn on whether this will have a negative or positive effect on the digital currency’s value.
While previously stimulus checks had a positive effect on the crypto market, insiders are unsure whether there will be another round, and whether the same actions will be taken. Unsurprisingly many Bitcoin bulls remain optimistic, expecting another surge and an even higher market value.
Finance Vs Health
As the virus took hold of the world and sent many countries, and its citizens, into crippling circumstances, it became evident that governments had to make a choice: prioritising the health of their nation or economic stability. While many will argue both cases, it became clear that health preservation triumphed, with many countries implementing strict lockdowns and international travel bans. In some cases, these bans still remain, however as many countries eased their restrictions they experienced a second wave.
Unfortunately, as a result of the initial lockdowns, economies plummeted and countries were put in very tough financial situations. On 12 March, the US stock markets witnessed the worst trading day witnessed since the Great Depression of 1929. Bitcoin was also succumbed by systematic risk and too lost close to $3,000 in a matter of a week.
Will Bitcoin Remain A Safe Haven Investment
With Coronavirus cases increasing, and many countries reissuing their lockdowns, Bitcoin investors are wondering whether they should brace themselves for another round of market dips. Thankfully CFA of Quantum Economics, Thomas Kuhn, reckons that won’t be the case, arguing that a second lockdown is unlikely to have the same devastating effects as the first.
An equally concerning factor is that as governments continue to bail out their economies (EU leaders also approved a €750 billion ($880 billion) relief package), their currencies are only going to depreciate in value as a result. Finance professor at Brighton University and inventor of crypto platform Evai.io, Professor Andros Gregoriou, concludes that “Governments printing money at will essentially devalues fiat. With a fixed supply and increased demand, you can’t ignore the attractiveness of cryptocurrency assets in these unprecedented times.”
Whether you’re bullish or bearish, Bitcoin remains to be a solid investment over these uncertain times. If you’d like to enter the market, Oobit offers a seamless and instant way to do so, staying true to their “use crypto as easily as traditional money” promise.
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