The COVID-19 pandemic has hit us on more fronts than just healthcare. It has affected every aspect of human life starting from social interactions to the world economy. While the governments are prioritizing saving lives and containing the virus spread, one can’t help but wonder what the economic scenario will be when the dust settles.
In the wake of the coronavirus outbreak, we have seen global financial markets crash, businesses shutting down and people losing their jobs. Market experts have raised concerns that the present economic downturn might even worse than the 2008 global recession.
With financial markets, not living up to the trader’s expectation, many have shifted their attention to the trading of digital assets or cryptocurrencies. The stock and equities market is yet to recover from the downturn, at least not till the global lockdown situation exists. Hence many who are confined indoors are utilizing their internet connection by crypto trading in the hopes of earning profits. How is it working out for them? That’s what we will discuss in this blog.
Diversification of Investment Portfolio
To diversify the investment portfolio is survival 1o1 in times of financial crisis. It is never a good idea to invest all your money on a single asset. Since the financial markets are on a bear phase, it seems like the right time to check out the crypto alternatives.
While pandemic and lockdown did initially affect the digital assets as well, due to people going on a selling spree but it was quick to recover in comparison to the financial markets. Cryptocurrency exchanges remain open for trading 24×7 and even if the trader is not getting a good price in a particular exchange, there are several others to try out.
Market experts always advise investors to have a diverse portfolio so that even if one investment touches the low, you can expect earnings from others. Even you haven’t yet given a thought to it, right now might be a good time. You don’t have to abandon your stocks, but giving crypto trading a fair shot.
Pandemic’s Effect on Crypto Prices
Very few know this, but cryptocurrency was born to tackle financial fallouts like the one that we are experiencing at the moment. It has been detailed in the Bitcoin whitepaper by creator Satoshi Nakamoto. However, when the pandemic hit, crypto suffered initial losses just like stocks. The prices dipped to a record low, as people were panic-selling their assets. According to data, the prices dropped more than 10 percent.
However, crypto was fast to recover and show bull trends after the initial setback and since then the traders and investors have been optimistic. Market analysts have suggested that buying crypto at a lower piece will benefit after the crisis is over, as the buyers will gain significantly.
Not a Good Time for Crypto-Scammers
The crypto market has been the silver lining amid this dark time, but not for the scammers. It was recently reported that more than 33 percent of the crypto scam revenue has been whipped out when the market took a toll. While the others recovered the losses, the scam money just obliviated. There has been a significant drop of around 60 percent in crypto scams in the past weeks.
One thing can be said with full surety that the pandemic crisis has somehow managed to put the spotlight on cryptocurrency. It’s not just the exchanges and trading platforms, but a surge has been noticed in blockchain gaming platforms as well, where the players are rewarded with crypto tokens. People are showing interest and playing games to earn profits via digital assets.
All these positive developments might have appeared at a grim hour, but they are not temporary. The effect is likely to remain unchanged, if not increase after the pandemic crisis is over.