The COVID-19 pandemic has surely impacted our lives on both personal and professional levels, along with almost all the people in the world. We all are well aware of the situation and the measures that were taken last year to prevent the spread of the deadly virus, like lockdowns, travel restrictions, public places closures, and whatnot. This all ultimately led to a heavy impact on the markets, be it the stock market or the cryptocurrency market, nothing is spared. So, in this article, we will be talking about Bitcoin, which was the most growing cryptocurrency during COVID-19, and the impact of COVID-19 on the cryptocurrency market. Talking further about how is cryptocurrency doing during COVID-19, and to be more precise, how is Bitcoin during COVID-19, this article will be helping readers to explore whether cryptocurrencies and especially Bitcoin have the potential to serve as a hedge against the cryptocurrency pandemic that was expected.
The fact that the oldest cryptocurrency was capable and still has got the potential to allure the attention and interests of the people interested in new investment options and financial enthusiasts can not be denied. It certainly is efficient, able to perform, capable of being hedged, and has its relationships built with the traditional financial assets.
While nearly all the stocks listed on various exchanges in the world witnessed their 52-week lows during the pandemic, there was this coin that witnessed its biggest rally in years, ultimately making its investors wealthy and confident about its potential.
From the levels of around $7,000 in the month of January in the year 2020 to touching its all-time high of $63,729 in the month of April 2021, Bitcoin has managed to become the most growing cryptocurrency during Covid-19.
Well, why and how did this happen? What made people trust in the digital asset with so much fluctuation, that too at the time of a pandemic?
In most of the developing countries, the situation went out of the hands of the government. Therefore, to ensure the safety of people, governments forced lockdowns in cities that led to the halting of work, ultimately leading people to the path of losing their jobs and facing losses in their respective businesses.
In the case of a country like India, people did lose their jobs and faced huge losses in their businesses, which forced them to take a chance and invest in cryptocurrencies to generate some side income from the digital assets. Moreover, the fact that this industry has given rise to many firms based on the technology of blockchain and crypto space. As a result of this, people are becoming crypto traders, crypto influencers and mentors, technical analysts, and even long-term investors.
This led to the rise in the price of Bitcoin, which according to a major segment of the society is the only capable cryptocurrency in the market. Eventually, this raised a sense of interest in the particular cryptocurrency and pushed its price to all-time highs.
Since the beginning of the year 2021, the leading cryptocurrency Bitcoin has surged around twice its price to $60,000 as it has been witnessed that financial and institutional interest has grown for the crypto space.
Marking the rise in the institutional interest from February 2021. Elon Musk’s electric car company Tesla revealed that it invested around $1.5 billion in Bitcoin, followed by the Mastercard allowing its merchants to accept Bitcoin as a payment.
Later in the same month, the Bank of New York Mellon revealed its plans to issue, hold, and transfer the Bitcoin holdings of clients, following the launch of the first North American Bitcoin ETF.
Moving ahead, Square, the payment company owned by Jack Dorsey, made a purchase of $170 million worth of Bitcoin. NYDIG, the crypto technology firm, managed to raise $200 million from giants like Soros Fund Management and Morgan Stanley in a fundraising round.
In the early days of March, Bitcoin witnessed a fantastic time when JPMorgan made an announcement that it is going to launch a crypto exposure product that will be led by Square and MicroStrategy. Following the announcement of JPMorgan, MicroStrategy made another investment of $15 million in Bitcoin.
Morgan Stanley offered its clients access to funds focusing on Bitcoin, ultimately becoming the first major American Bank to offer access to bitcoin funds to its clients.
People believe in Bitcoin, and the bulls of the market see it as a store of value similar to gold. Moreover, they believe that the cryptocurrency should be held for the long term as a hedge against inflation. In addition to this, it is also believed that Bitcoin has the potential to beat the market capitalization of gold in coming years and will be assisting people economically in times of crises as it has proven its credibility by becoming the most growing cryptocurrency during COVID-19.