The year 2020 seems to be the ultimate test for cryptocurrencies as it is being hit hard by Covid19 pandemic disease. It has been a long time since the disease has emerged from China and have been continuously devouring the life of people from all over the world. There will be hardly any few countries which are away from its reach. Not only India, but the economy of the whole world is crippling due to its ongoing cases. Still, there has been no vaccine invented that can save you from the clutches of Covid19. The only solution left is a lockdown. But do you think it will solve the problem of crashing cryptocurrencies? No, definitely not. Let us know more about the state of cryptocurrencies during Covid19.
It seems like a versus situation where we are seeing corona vs cryptocurrencies. The battle no doubt is very challenging for the latter in facing the demonic monster in form of Covid19 disease. Instead of getting the good news of its diminishing, there is daily news of its ongoing cases encouraged by some anti–social or you can say anti–national groups who due to unknown reasons are expressing love for the disease. This has resulted in more negative output for the whole country (specifically India). In terms of cryptocurrencies, Bitcoin the most popular digital coin among its admirers is facing a crushing defeat to coronavirus by falling below to $4K from $10K in months of February to March. Not only Bitcoin, but the hash rate has also gone down due to the Covid19 impact.
The reason for the drop in hash rate is all because of the consistent spread of global turmoil that everyone is familiar with. But he has expressed hope in the form of Ponzi schemes. With promising high returns, people here are encouraged to invest in a specific amount of coin. But unfortunately, cashing out of Ponzi schemes has also resulted in affecting the Bitcoin price.
Drop Of Liquidity
The state of cryptocurrencies during COVID19 can also be seen down with the drop of liquidity as stated by a founder of a marketing solution company. The factor which is responsible for its fall is none other than the global pandemic disease corona. Apart from Bitcoin and other fellow currencies, Covid19 has also badly affected the mining process of cryptocurrency. Mining farms are equivalent to data centres that need maximum power and cooling solutions for the machines. But due to the worldwide practice of lockdown, the services of the mines have become very tough. Not only India but China too seems to be bearing the brunt of lockdowns. Cryptocurrency miners are not capable for essential services. Due to the sharp decline in Bitcoin’s market price, digital farms are too shut down.
So now you can analyze the state of cryptocurrencies during Covid19. This monstrous pandemic disease has been spreading widely all over the world and devouring more and more lives. Not only health but it has made the economic system dysfunctional or made it to a halt. There is hardly any sector left that is safe from this global disease. Bitcoin, the most popular cryptocurrency has too faced a defeat from Covid19 resulting fall in its price. Not only Bitcoin, but other fellow currencies too have faced the same fate. Even the process of mining of the cryptocurrencies is too affected due to lockdown practice in the countries. Till now, there has been no solution that could contradict coronavirus.