While the coronavirus disturbed the usual life on the Earth bitcoin price soared by 200% this year. Reportedly, its trading volumes have not come down since November on many exchange platforms. It was around 22,000 USD and rose up to 24,000 USD on December 23. Bitcoin’s current market capitalization is around 440 billion USD.
Bitcoin has seen few setbacks in the past which is why most markets have not shown any faith. However, this year has been one of the glorious ones.
Bitcoin Price Volatility Explained
This is not the first time bitcoin price has spiked after sharp declines but experts have said that this time is different. Amidst crisis and uncertainty, bitcoin is being seen as a digital version of gold. Of course, there are many other alternate coins to keep trading if the Bitcoin rate is fluctuating. Coronavirus pandemic has been reshaping the economy and some investors have found Bitcoin to be safe equivalent to the precious metal. By now it has become clear that the decline in the price of Bitcoin has only turned out to be better for future investment.
Ex NSA employee and the United States whistleblower, Edward Snowden has also recently shown interest to buy Bitcoin. On March 13, it was only 3,600 USD when Snowden apparently bought it and now after 5 months it’s 24,000 USD; more than 500% profit for the real-life vigilante
The recent volatility in the price of Bitcoin could be due to different investor attitudes towards the cryptocurrency system.
Rise in Bitcoin Price due to Covid 19
There are two things that have performed well despite the Covid 19 pandemic that brought normal life to a halt; the first is the wealth of CEOs from tech giants and the second is the value of the bitcoin and other cryptocurrencies. The reason for both can be traced back to the increased use of digital channels that resulted from the increase in e-commerce and reliance on online platforms. While cryptocurrencies are still facing obstacles from the regulators, their need has become evident more than ever due to the pandemic. People have realized the importance of maintaining digital wallets that can help them survive in an era where earning traditional money and using it for meeting day to day needs has become a cumbersome process.
It was by the end of 2017 when bitcoin witnessed its peak value after crossing the psychological barrier of $10,000 in November that year. However, later the cryptocurrency faced massive declines in value due to speculated regulation in Asia. In the years 2018 and 2019, the bitcoin performed worst in terms of value and market capitalization. However, now at the end of 2020, the Bitcoin price is seeing another peak due to reasons specific to the covid 19 pandemic.
Replacement For The Flawed Monetary System
Russian media reported that Bitcoin price is only going to rise regardless of the pandemic or the sorry state of international affairs. Cryptocurrency will not only trade similar to the market capitalization of gold but it will be better than gold. Max Kaizer of the Kaizer Report explained that crypto will solve the critical problem of poverty by decapitalizing the banks.
Doing so will eliminate fiat currency; which has caused poverty in the first place. Kaizer added that fiat currency has never worked in history which is why it has to be replaced by something more robust and transparent.
The Ultimate Store Of Value
A long-time critic of crypto, Inigo Fraser-Jenkins used to say that it was a ‘risky’ investment but now he changed his mind to ‘recommended’. Due to high debt levels and diverse investing options, crypto is increasingly becoming an attractive asset. The volatility of Bitcoin this year has been higher than the stock index S&P 500 and gold. If Bitcoin reaches 500,000 USD per coin, it would coincide with the market capitalization of gold which is at 9 – 11 trillion USD
It can only happen if the number of investors in bitcoin increase over the coming years.