The covid-19 pandemic has highly affected financial products, whether commodities market, crypto market or the stock market. The world has experienced such turbulence in the economy for the first time. There have been crashes in the market, and investors have lost their money in it. The recent crash in the cryptocurrency market has been seen as a price correction. Bitcoin is a store of wealth and value, and it should be treated as an investment class that can help you earn great gains in the long term. While price corrections are part of every investment asset class and bitcoin is not different.
By looking at bitcoin's price in past years, you'll notice that there has been steady growth, but these are expected to be temporary and not permanent. But it is for sure that year 2020 has been a significant year for cryptocurrencies like bitcoin and blockchain. Where the world has faced economic meltdowns, bitcoin and other cryptocurrencies have proved to be extraordinarily flexible. The great increase in the convenience of digitalization and high-speed internet has created a great environment for bitcoin and other digital currencies. But the scene of cryptocurrencies is different in India, and many platforms have been developed to educate the citizens of India to learn about cryptocurrencies and use them more for daily transactions and investment purposes. Not only this, if users want to gain more information about bitcoin, they can read more from here. It also helps the users to invest in bitcoin. Bitcoin has been the most popular and trending cryptocurrency, and additionally, it has become the highest valued asset as of 2020. If we closely monitor the prices of bitcoin in history, you will notice that it is the only cryptocurrency that has performed tremendously, and its value has increased around 500% in the past few months. Even other cryptocurrencies like Dogecoin, Ethereum and more are performing so well and have been adopted more in the mainstream. People are still expecting that coronavirus will end by being optimistic, but it is important to learn the role that bitcoin and blockchain will play in the post-pandemic world.
Here, we will put into the limelight the list of factors or challenges that the crypto world has to go through in the coming years.
Banks going digital
In the pandemic, people are moving on towards digital ways and digital payments instead of traditional payments. In mid-2020, the trend of digital payments has increased by around 82% in the volume in specific countries like India at the time of the unlocking phase. Such an amazing increase in payment trends has made the Central banks introduce CDBC's as an alternative option of making payments in the digital economy.
Central Bank Digital Currencies are digitalized currencies of countries that are created, issued and backed by monetary authorities. China is the only early adopter and leader that started dealing in digital currencies. Even the Reserve Bank of India has shown its interest in launching CDBCs for their fiat currency, i.e., the Indian Rupee.
Cryptocurrencies regulatory actions
Emerging markets across the world have planned to integrate the cryptocurrencies like bitcoin and more in their economy. For example, Costa Rice has announced that they will start paying their employees in cryptocurrencies and even encourage its citizens to adopt digital currencies more. Phillippines is another great example where the central bank has approved crypto exchanges and has adopted the booming technologies. Specifically in India, there have been many talks in the media about regulating cryptocurrencies, but the government hasn't given any official announcement about this new asset class. But crypto experts highly believe that lack of regulations is the main reason that has resulted in dealings in the catastrophic black market.
The rapid increase in economic activities
Considering the age of bitcoin, it was introduced only a decade ago, and according to that, it has made ground-breaking records in its growth. The whole system is shocked but is eager to learn about and adopt cryptocurrencies. Even many investors and traders are taking shelter under bitcoin to protect them against inflation. Cryptocurrencies are highly accessible, and because it is a digital currency, there isn't any need for infrastructure. Many platforms have been developed to enable people to use bitcoin to make low-cost transactions without involving central authorities.