How The Coronavirus Epidemic Impacts Blockchain & Cryptocurrencies?
No matter where you are on Earth, you can feel the impact of the COVID-19 pandemic. Coronavirus has a negative impact on the industry, tourism, trade, stock markets, and of course, cryptocurrencies. In this article, we will consider how this epidemic has affected the blockchain industry and how it will affect the development of the cryptocurrency industry.
When the World Health Organization (WHO) officially announced a coronavirus pandemic, almost all investment vehicles in the world responded with a decline. The stock market has had its worst days in the past decade, with commodities, corporate debt, real estate, and even seemingly "independent" cryptocurrencies being hit.
Following traditional assets (mainly oil), the Bitcoin exchange rate plummeted immediately, driving altcoins. Although the cryptocurrency market has partially recovered from the crash on Friday 13th, small projects are not ready to take such a huge blow.
Raising Funds Becomes Difficult
Since the ICO market has actually crashed, blockchain startups are now mainly seeking to attract venture capital. However, given the spread of the coronavirus and the uncertainty surrounding the global economic space, this method of attracting investment has also caused much controversy in the past few weeks. Private meetings have become impossible, and investors have looked more closely at their investments than ever before.
Gustav Christopher Wagner, founder and CEO of market data provider Blockfacts, emphasizes:
"As the COVID-19 becomes a global crisis, talks with potential investors are limited to video conferencing. Fortunately, venture capitalists are happy to hold virtual meetings and close-range financing. However, money in niche markets has decreased. "
Cryptocurrency Conferences Cancelled
When coronavirus began to spread outside China, it became clear that COVID-19 was no longer an internal problem in China. Once the epidemic hits other world powers, the first few blockchain conferences were cancelled immediately. After the Ethereum conference "infected" several prominent representatives of the cryptocurrency community, they even tabooed the entire planet in the incident. By early March, almost all blockchain conferences were cancelled/postponed until late summer/fall 2020.
Since the cryptocurrency industry has indeed been overwhelmed (important and not serious) by events over the past few years, a short break may not be useless to the community, but it is a heavy financial blow for the organizers.
Fortunately, in the modern world, there are still opportunities for virtual events. This is exactly the method chosen by the industry-leading consensus conference after the COVID-19 pandemic, rather than organizing a large crowd at a New York hotel (the epicentre of the US coronavirus).
Remote Work Becomes Commonplace
Image Source: Photo by Daria Nepriakhina on Unsplash
The positive side is that many startups, cryptocurrency projects, and their customers have actively embraced remote interaction from the beginning. Therefore, the global shift to remote work will not cause serious damage to the blockchain industry-the industry can develop in this format without compromising the quality of interaction between the parties.
The cryptocurrency industry may be one of the best areas for effective communication in different time zones, maintaining productivity and remote command management. Although employees in other industries can hardly adapt to new conditions, most cryptocurrency startups can already work remotely. A good example of this are blogs in countries such as Italy, which was highly affected by the COVID-19 spread. Blogs such as the Italian news blog cripto-valuta
keep publishing daily news on bitcoin and crypto-related subjects.
Stablecoin on Horseback
The use of stablecoins has increased in the past few weeks. The dollar-backed digital currency, in particular, felt a large influx of funds, as traders and investors converted their cryptocurrencies into stable assets when risk instruments crashed.
Two leading stablecoins in the market, Tether USD (USDT) and USD Coin (USDC), have flowed in, but smaller currencies (such as Binance USD (BUSD) and Paxos Standard (PAX)) have witnessed unprecedented interest from users.
In recent days, the markets demand for stablecoins has continued to grow, reaching a new ATH, with a turnover of 568 million U.S. dollars. Seeing that the cryptocurrency macro market“ escapes to a safe haven ”and the market ’s demand for high-quality US dollar liquidity, It's exciting.
In the near future, the demand for virtual, fast, global, secure, cheap-to-use digital currencies will increase significantly. Experts add that people and companies will need an architecture that enables them to trade with lower counterparties Risk and higher security for making and receiving payments.
It is unclear what impact the digital asset industry will have on the medium and long term. At present, the cryptocurrency and stock markets need to assess the current situation and return to normal. How much time will it take is still unknown?
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