The coronavirus pandemic is leading to the worsening of the economic situation throughout the world. Crypto experts are making analysis of the growing interest in the digital money by the population who are disappointed with the current financial system. The president of the World Bank states that about 60 million people may be in extreme poverty. Countries that are now experiencing a severe economic crisis show the increased demand for cryptocurrencies.
The World Bank is committed to providing $ 160 billion to developing countries in the form of grants, loans, and investments to combat the effects of the coronavirus pandemic within 15 months. In addition, they emphasize that countries are to expend business assistance programs and provide financial support to the poor in order to overcome the consequences of the pandemic.
Crypto circulation at the times of crisis
Nowadays they reveal the whole dynamics of the pandemic starting from the very first case of the virus infection. Though a number of countries are gradually reducing quarantine restrictions, there is still no end observed to overcome the disease. At the same time, the economic crisis is only in its initial stage.
What concerns Bitcoin’s ‘survival’, it is getting more popular in developing countries with serious economic problems. For example, in Argentina and Venezuela, the value of the first cryptocurrency has repeatedly risen above the market average. Last November, the Argentine branch of LocalBitcoins watched record trading volumes.
This happened in a consequence of the implementation of a restriction on the purchase of dollars at $ 200 whereas it used to be $ 10,000. Moreover, the p2p platform in Venezuela also showed similar dynamics, with the transactions worth more than142.9 billion bolivars in a week period.
Observing hyperinflation of the Venezuelan bolivar, local residents began to use cryptocurrencies as a means of preserving value. In general, the current situation with the virus will accelerate the process of adaptation and obtaining various kinds of licenses for the digital world. Nevertheless, it will not solve the issue of wide distribution, as the economy requires the traditional financial system.
Cryptocurrency is not a lifesaver
Cryptocurrency is considered by most as a means of investment, risky investment. Cryptocurrency can hardly help population at crisis. People have no extra money for investment or even simply money. For those who do, digital coins may play a role of a protective asset and crypto followers believe that they never undergo the inflation troubles.
At this point of view cryptocurrencies might be a way-out for countries where inflation reaches two-digit, and sometimes three-digit numbers, as in Venezuela or Argentina. Their population experience shortages of essential goods, unemployment and a number of other social problems. It is impossible to maintain savings in such conditions. All this leads to increased demand for other, more solid currencies and cryptocurrencies in particular.
To conclude
This year has struck all the world with global changes, feelings of uncertainty and mistrust. The crypto situation seems to be less conformable and digital enthusiasts are sure of the stable existence and enhancement of cryptocurrencies. Both cryptocurrency and blockchain have seen a steady increase of supporters through the years. Since the beginning of this year, bitcoin has risen in price by a third, to $ 9,764. Some experts believe that global shocks will benefit a new type of asset and it looks like blockchain technology and cryptocurrencies are here to stay.