2020 05 29
So far these digital assets have passed the first economic crisis of their existence with few blows. How long will it last?
Impact of the coronavirus on bitcoin and other cryptocurrencies Google searches for bitcoin soared once the pandemic started. But in recent days they have stabilized.
It seems that the predictions of the World Economic Forum on blockchain, the technology of bitcoin, are being fulfilled. For the agency, in 2019 this block technology went from being a boom to having more solid and quality bases. He predicted that in 2020 more experiments with blockchain would be carried out and its great potential to solve social problems would be seen.
And today, thanks to the pandemic, that prediction seems to be coming true. No one doubts that this phenomenon set foot on the accelerator to adopt new technologies. And blockchain was no exception.
In the world, initiatives based on this technology have already been born to fight the virus. In late March, the World Health Organization (WHO) teamed up with tech giants IBM, Oracle and Microsoft to create a data center based on blockchain technology. MiPasa, the name of the project, will collect and verify data on the pandemic without the need for personal information from citizens of the world. The platform is expected to alert users if they were near an infected person and to see the virus spread in real time and accurately.
But beyond that application, many these days touch on a topic related to one of the blockchain products: cryptocurrencies. Some experts consider that this year, despite the uncertainty, they could consolidate, especially bitcoin.
At the beginning of the year, the value of this cryptocurrency ranged from $ 8,000 to $ 12,000. But when the WHO declared the pandemic on March 11, its value plummeted more than 70%.
However, it managed to get up a little and, despite the difficulties worldwide, it was regulating its price, to trade in the last days around US $ 6,000. A similar scenario featured cryptocurrencies like Ethereum, Theter, and XRS.
Cryptocurrency promoters have highlighted its resilience. “Bitcoin was born in a crisis but had never experienced it firsthand until today, and it passed the test,” says Marcelo Granada, CEO of Criptopi, a bitcoin trading platform. In his concept, the current circumstances will awaken interest in these digital assets.
The authorities have had to make drastic decisions to face the crisis, such as cutting interest rates, adopting expansive monetary policies based on “helicopter money” and making strong devaluations that affect most markets. Meanwhile, cryptocurrencies maintain their high level of volatility.
For Magdiela Rivas, Latin America manager for Paxful, another bitcoin trading platform, that cryptocurrencies devalue less than real currencies could make them a safe haven asset. “People see that their money is losing value, which leads them to look for other investments and cryptocurrencies, despite their high volatility, are more stable at the moment. This leads to increased interest in this alternative, “he says.
However, another opinion is held by finance experts, for whom cryptocurrencies remain a high-risk investment, which does not have the support or oversight of the authorities. For them, they are only recommended for those who understand how it works, know how to get out and, above all, have the capacity to withstand large devaluations and market fluctuations. Because the most profitable assets are always the riskiest.
Despite this, interest in this topic grows. Google searches for cryptocurrencies have almost doubled in the world, and in Colombia it has grown up to 400%. At the same time, the exchange of bitcoins and other cryptocurrencies grew, with more users and higher trading volumes.
Given this, Rivas points out that cryptocurrencies are attractive, since they are a finite good and are not issued by a central bank. This, according to Granada, has helped these assets to recover faster, as they are not affected by monetary policy measures or government decisions.
“Until today we have seen bitcoin as a means of payment, as an instrument of speculation. But more and more people are seeing in these assets characteristics similar to those of gold or silver, which are worth for themselves and do not depend on the decisions of anyone.