The COVID-19 pandemic has turned from a health crisis to a severe economic crisis as countries worldwide shut down their economies and prevent human-to-human movement and interaction to slow the virus’s spread.
The economic downturn initially resulted in significant sales in financial markets as investors turned risky assets into asylum properties to protect their investments.
With the spread of the global coronavirus (COVID-19) pandemic, Bitcoin’s relationship and the exchange have flourished. For example, bitcoin’s price fell below $ 4,000 on March 12, 2020, after a sharp drop in the US S&P index.
The projected rate is closely related to the coronavirus’s prevalence in a particular region. For example, China claims to have stopped the spread of the pandemic in its territory and announced it would launch its nationwide blockchain network as planned in April 2020. Following the recent closure of their offices and facilities, Chinese mining companies have suspended operations due to the spread of the virus that is in the area.
Russia has postponed implementing the cryptocurrency law indefinitely as the number of COVID-19 incidents has increased dramatically. Previously, the Russian government had halved its budget allocation for improving blockchain technology. In New York, where there are reports of an unprecedented number of coronavirus infections, nearly all major companies have closed their offices.
Companies Cut Budget During COVID-19 Pandemic
Big blockchain analytics companies such as Elliptic, Chainalysis, and CipherTrace have announced that they will be cutting staff or budgets, or will be doing so soon, to reduce the economic impact of the COVID-19 epidemic.
Elliptic eliminated 30% of workers in the United States and Great Britain. CipherTrace has cut jobs in its advertising and marketing department, and Chainalysis has published a proposal to reduce employee salaries by 10%.
Crypto Token Sale Restrictions
The economic constraints and troubles caused by the coronavirus have rendered some token sales uninvested, while others have slowed their production at the same time. A recent study by ICOBench in 2020 found that the contributions made by companies in the last week of January to the first week of February were significantly lower compared to the same period the previous year.
Additionally, the virus’s spread has forced crypto companies to implement a work from home strategy and postponed many business partnerships.
Although the long-term effects of COVID-19 on the economy are unpredictable, given the culture and well-being of society, it seems reasonable to bet that a central bank response would create the ideal atmosphere to keep the market going. If Bitcoin continues to outperform traditional markets, it could spark additional interest in crypto as an alternative and sustainable form of currency.
The popularity of virtual or digital currencies such as bitcoin, litecoin, ether, and many others will drive the market in the coming years. People in developed countries tend to use flexible and straightforward transaction methods that digital currencies offer.