The future of cryptocurrency after the pandemic

Every financial product has been affected by the pandemic, including the share market, commodity market, and even the cryptocurrency business. The outbreak of COVID-19 has wreaked havoc on the economy. The present drop in the bitcoin market should be viewed as a blip. Bitcoin is a store of wealth that should be considered an asset category with a long-term growth prediction. Price fluctuations are a fact of life in any asset class, and bitcoin is no exception. If you look at the year-over-year increase in Bitcoin pricing, you’ll notice that it’s been consistent. As a result, recent statements from industry heavyweights have contributed to certain pricing adjustments, but these are not permanent.

For cryptocurrencies and blockchain, the past year has been a turning point. In the face of these upheavals and economic breakdowns, cryptocurrency has proven to be quite resilient. Fortunately, the fast rise in worldwide high-speed internet access and digitization has created a fertile ground for digital currency.

The Amplitude of the Long-memory index was used to assess cryptocurrency efficiency. The data reveal that before the disease outbreak, Bitcoin has been the most efficient; but, after the COVID-19 epidemic, it was determined to be less effective than Ethereum. Furthermore, as the virus spreads, all of the examined cryptocurrencies grow more efficient (Manif et. at., 2020).

With the vaccine program in full swing and massive community efforts to combat the coronavirus, we could be guardedly optimistic that the virus’s end is nigh. But, as we adjust to the post-pandemic world’s new normal, what influence will cryptocurrencies play?

Here’s a list of forecasts on how the crypto world will evolve in the following years, which could signal the start of the post-pandemic era.

Actions are taken by regulators in the cryptocurrency space

Several emerging economies have already begun to incorporate Bitcoin and other cryptocurrencies within their economies. Costa Rica, for example, has stated that employees may be paid lawfully in cryptocurrency. As a result, the country’s adoption of the technology skyrocketed. Another country that has embraced cryptocurrency in the Philippines. The Philippines’ central bank licensed almost sixteen cryptocurrency exchanges last year, putting the country at the forefront of Southeast Asia’s expanding technology.

Occasionally, there has been discussion in the media about the regulation of cryptocurrencies. The government has yet to take a position on this major asset class in terms of regulation. Experts think that a lack of control in such a potentially lucrative fintech industry could lead to disastrous black market transactions. Another country that has embraced cryptocurrency in the Philippines. The Philippines’ central bank licensed almost sixteen cryptocurrency exchanges last year, putting the country at the frontline of Southeast Asia’s expanding technology.

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The world’s central banks are going digital.

People are more willing than ever to use digital payment modes as a result of the pandemic. When the unlock phase went live in India in the second quarter of 2020, digital payments grew by over 82 percent in volume. As a result of this shift in payment patterns, central banks throughout the world are considering introducing Central Bank Digital Currencies (CDBCs) as a digital economy payment option.

CBDCs, unlike cryptos, are a digitized version of a country’s computerized currency that is created, backed, and distributed by the government. China continues to be a digital currency leader, and the digital Yuan is currently being tested.

However, the CBDC movement is not limited to China. According to a survey done by the Bank of International Settlements (BIS) in Switzerland, more than 80% of the 66 institutions examined are conducting their own CBDC experiments. The first CBDC reports were released by the central banks of Japan, Canada, the European Union, England, Sweden, Switzerland, and the United States.

An increase in economic activity that is active

The speed at which the asset is fast increasing is unprecedented, given that it was just established a decade ago. There is already a structure in place, as well as companies built around cryptocurrencies all over the world. Many corporate investors have jumped into cryptocurrencies in search of a haven from the traditional economy’s inflation. Even institutions that previously declined to consider cryptocurrency are now opening storefronts to provide customers with cryptocurrency services.

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We live in a time where further than two-thirds of the population lacks access to banking services such as loans, savings, and other financial services. It could result in risky lending practices with excessive interest rates. The financial stability of such locations can be improved by incorporating cryptocurrencies. Because of its simplicity and extreme volatility, it provides various opportunities for the less fortunate to accumulate riches.

Apps and platforms like CoinSwitch Kuber, which make crypto transactions simple, can reach rural areas and bring people up to speed with the rest of the world. Cryptocurrencies’ decentralized structure also allows for low-cost cross-border transactions. As a result, promoting a financial system transformation that might leave us more powerful, connected, and enabled.

Final thoughts!

While we wait for the COVID problem to fade away, it’s exciting to consider what crypto can do as an asset category and a money system around the world. It would be unrealistic to expect cryptocurrencies to avoid another crisis; they will very certainly face several. But it has demonstrated its resiliency in the face of what has been dubbed “the worst crisis of the century,” giving us optimism that cryptocurrencies can withstand any storm and capitalize on whatever the “new normal” maybe.