Coronavirus Affecting Cryptocurrencies

Coronavirus Affecting Cryptocurrencies

There are hardly any technologies, industries or ways of life that have remained free of disruption from the surging prevalence of coronavirus. The virus causes the respiratory illness COVID-19 and has infected some 350,000 people worldwide already. It has prompted quarantine orders, an influx of hospital visits and major disruptions to the world’s economies. Even inherently decentralized ecosystems, like those of blockchain technology and cryptocurrencies, underwent significant change; perhaps even permanently reshaped — by the epidemic.

Cryptocurrencies and Much-Needed Medical Supplies

While coronavirus and the worldwide surge in health complications has put an incredible strain on healthcare workers; the supply chains they rely on, this moment has also put an undeniable spotlight on the potential of blockchain technology. Blockchains that can track transactions in transparent ways might offer

It can be inferred that investors see bitcoin as a safety net that is free from centralized reactions to coronavirus.

“Essentially, the Fed now stands ready to expand its bond purchases as required. The central bank’s balance sheet hit a record $4.7 trillion last week,” according to CoinDesk. “Bitcoin’s move higher along with gold is likely to revise the safe-haven narrative but it will be interesting to see if the positive correlation persists.”

As economies around the world continue to reel in the face of coronavirus uncertainty, quarantine orders and loss of productivity, migration into cryptocurrencies will be an indicator to watch. Through both its potential use in traditional supply chains and as the backbone of cryptocurrencies, blockchain technology is proving to be worthy of attention in these uncertain times.

So, it shouldn’t be a surprise that some are pointing to this moment as a chance for blockchain-based solutions to provide relief to those in need of a streamlined route to medical supplies.

Blockchain Solutions Seems to Be More Reliable

“Traditional tools of Excel Sheets and Google Forms are currently being used to govern supplies, with legal contracts being uncertain, inability of individuals to fly to verify factories’ capacity and breakdown of trust of the trade finance and letters of credit traditional payment mechanism,” Forbes reported of the current issues facing the medical supply chain. “Lack of trust is the biggest bottleneck preventing this market ramping up quicker. So speed is of the essence in the next few weeks.”

As its proponents know, blockchain technology means to inherently offer trust between transaction parties. As such, it may offer a solution to the current crisis.

Forbes highlighted, blockchains may be leveraged to continuously update factories with medical product specifications. Besides, they can ensure payments to supply producers and track the transportation of these supplies, among other things.

“While the U.S. Congress explores a $2 trillion economic stimulus package, a blockchain solution could also help ensure companies adhere to conditions set in such a package,” per Forbes.

Cryptocurrencies and Traditional Assets in a Time of Crisis

Blockchain technology also undergirds an asset class that will continue to be significantly affected by the coronavirus epidemic: cryptocurrencies. It looks like that investors are turning to bitcoin instead of the traditional financial systems that are manipulated by central authorities.

“Bitcoin’s … price shot up along with gold and stock futures after the U.S. Federal Reserve announced a quantitative easing package with no upper limit to support the economy amid the coronavirus crisis,” CoinDesk reported. “Immediately after the … announcement, bitcoin jumped from $5,860 to $6,628 in an hour.”

It can be inferred that investors see bitcoin as a safety net that is free from centralized reactions to coronavirus.

“Essentially, the Fed now stands ready to expand its bond purchases as required. The central bank’s balance sheet hit a record $4.7 trillion last week,” according to CoinDesk. “Bitcoin’s move higher along with gold is likely to revise the safe-haven narrative. However, it will be interesting to see if the positive correlation persists.”

Economies around the world continue to reel in the face of coronavirus uncertainty. Consequently, quarantine orders and loss of productivity, migration into cryptocurrencies will be an indicator to watch. Through both its potential use in traditional supply chains and as the backbone of cryptocurrencies, blockchain technology is proving to be worthy of attention in these uncertain times.

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