How Bitcoin Is Beating The Coronavirus Economic Slowdown

By Staff Reporter - 15 Aug '20 10:11AM
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  • How Bitcoin Is Beating The Coronavirus Economic Slowdown
  • (Photo : pixabay)

Cryptocurrency has been recorded to have outperformed other assets such as bonds, stocks, real estate, and others since the coronavirus outbreak early this year. The investors are affirmative that bitcoin will not be affected by the economic slowdown of coronavirus. The regulatory bodies of maximum countries say that bitcoins cannot be banned for it is being used by millions. Additionally, it has also brought many other traders, investing in bitcoins with high volumes of trading, said the market analysts.

What is bitcoin and why it is not affected?

Bitcoin is a technology, that is developed by coding and encrypting internally. This process is called mining. Unlike fiat currencies, this is not regulated by banks or currency reserves. Anyone with coding skills can copy the code and make their own version of altcoins. While the bitcoin miners can mine bitcoins and distribute it using the digital exchanges. Since no bank is involved this is a decentralized process and it not controlled by the government. 

But you don't have to worry about the traceability of these coins. Since the transaction history is present in the blockchain technology the money can be followed to the link went and came from. The blockchain network will allow the users to be private, thus being anonymous on the public ledger. The private key for bitcoins ensures that only the user carrying can access the digital currencies they have secured.

What is happening inside the bitcoin sector?

Bitcoin will not be affected by the falling economic conditions or effects of pandemics like the one we are in right now. As bitcoin is being mined privately and dispatched, it is also being controlled. Even though the government bodies are not involved, the individuals distributing bitcoins have tied the supply to 21 million bitcoins. This ensures the scarcity of the asset making it invaluable over time.

17 million coins have already been mined while only 4 million to go. However the last bitcoin is said to be mined in 2140, so this is a long stretched process. You can use this time to cycle your purchased bitcoin in this wheel. If the present rate is $11,250 imagine it's value just 5 years from now.

The other factors that are affecting bitcoin are its mining process, demand (just like any other asset), the area you live, and other such things. Since the last bitcoin is said to be mined in 2140, we can imagine a long break sometime in the middle as 17 million are already mined. Like any other asset, bitcoin depends on its market demand, which is still not enough. Investors say that more the involvement, the more the chances of cycling the asset.

Additionally, bitcoin is available in different fractions and it's astonishing to see it goes as low as 0.00000001 ฿. Even a dollar can not be broken down to this fraction. So, there is a lot of scope for small trade that over time adds up to a good value. But for trading bitcoins, you have to make sure your government approves cryptocurrencies. Many countries have banned the use of bitcoins and made it illegal. Hence if you want to trade bitcoin, check your internet connection and legal permission alike.

Government Involvement

Bitcoin is also taxed by many countries while maxim countries like the US have called it under digital assets. Hence crypto trading is subjected to asset tax profit returns. Since crypto is classed as an asset it is not controlled by the government. However, the increasing crime that crypto had attracted once had turned the federal eyes towards the blockchain technologies.

Reports of money laundering, drug sell, illegal involvements, weapon sale, etc started generated from these secure channels. But, sooner the regulatory bodies started taking actions against the unlawful activities. Introducing a set of rules for trading cryptocurrencies. This includes anti-money laundering acts, checking the exchanges for authorizing users wit bitcoins, and several such measures. It had to be done for the safety of the users, and protecting them from fraud and committing a federal crime.

Conclusion

The COVID-19 pandemic sure had raised a huge financial void in the fiat economic stature. However, due to the volatile nature of bitcoins, it was not affected badly. Like every other asset and currency bitcoin is also prone to risks and trials. I am not saying that it is a safe haven for investments, but looking at the secure nature it sure is useful. If you are interested in trading bitcoins you can visit bitcoin-pro.live and start investing.    

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* This is a contributed article and this content does not necessarily represent the views of newseveryday.com

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