How Has Coronavirus Impacted Bitcoin

Written by | Enterprise Technology, Fintech

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How has Coronavirus Impacted Bitcoin?

Introduction

The Covid-19 pandemic has impacted almost every aspect of our life. We can observe drastic changes in our daily lives across all activities. Most importantly it redefined business activities for both the producer and consumer alike. It brought in a new world order with minimal physical contact.

While the traditional model of business suffered a setback, it opened up an entire spectrum of digital possibilities. Digital payments, e-commerce, and cryptocurrency are becoming immensely popular these days. Limited mobility and Covid-19 related restrictions are the key reasons for the growth of this sector. In this blog, let us explore the impact of the coronavirus pandemic on Bitcoin.

Economic Impact of Coronavirus

The coronavirus pandemic and the subsequent lockdowns halted most of the economic activity across the globe. It caused widespread stagnation in both product and raw material movement. This in turn led to the closure of many manufacturing activities. On the other hand, local retail businesses also faced a lot of hardships.

In short, there has been an economic crisis for almost all countries. Everywhere people were looking for liquidating their assets into cash. This has been the trend for both traditional assets and cryptocurrency. But now cryptocurrencies such as Bitcoin and Ethereum are reviving quickly. This is a great opportunity for ICT companies to grow. Companies working on data centers and cloud storage will see more opportunities in Bitcoin mining and trading.

Bitcoin- Is It the Next Haven for Investment?

Traditionally, gold and silver are believed to be the haven for long-term investments. Now Bitcoin is also slowly moving into that category. But it has to go a long way before reaching that ultimate status. Governments across the globe are still unclear about the regulatory policies regarding the use of Bitcoin. At present, they are in a damage control mode to rescue prevent the collapse of the economy. But in the long run, it is expected that currencies will weaken due to their surplus availability in the market. This presents a unique opportunity for Bitcoin to become a strong contender for dominating the fintech sector. So, did the coronavirus pandemic have any impact on Bitcoin? What is in store for ICT companies in this context? Let us explore more about this.

Impact of Coronavirus on Bitcoin

It is true that coronavirus had a significant impact on all aspects of our life. But we are slowly bouncing back to economic recovery. Post Covid-19 pandemic, the future looks bright for digital currencies as the ecosystem for this is evolving fast. Three major aspects in this regard are

·        More and more companies recognize Bitcoin as an investment option.

·        The discussions regarding central bank digital currencies (CBDC) are in the advance stages.

·      Governments across the world acknowledge the need bring in policy and regulatory clarity regarding Bitcoin.

ICT companies are going to reap maximum benefits from these new developments. Mining and trading of Bitcoin require a lot of technical support. Multiple aspects including the creation of network and infrastructure, storage options, and other smart solutions will be very crucial.

The major areas for ICT companies to focus on in Bitcoin are,

Growing Market for Data Centers: With the growth of the Bitcoin market, enterprise data centers are going to be in high demand. Technology companies working in this sector can expect a multi-fold increase in their business activity. But they need to upgrade their infrastructure to cater to this demand.

Sustainable Bitcoin Mining: Bitcoin mining is an energy-intensive process. The data center infrastructure requires a large amount of energy for its continuous operation.

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Currently, the power comes from fossil fuels such as coal. Now the trend is moving towards powering these centers with smart energy solutions including solar and wind power.

Cloud Mining: Owning Bitcoin mining equipment is a very costly affair for many people. This has opened up the prospects of renting or leasing these mining equipment. With the growing demand for Bitcoin, ICT companies can leverage renting mining assets.

Conclusion

Digital currencies are all set to become the next big thing in finance. All the supporting factors are slowly falling in place for this. Bitcoin is also riding high on this positive factor. Moving forward, this will translate into a big win for technology companies providing Bitcoin mining and trading support.

Last modified: April 18, 2021

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