COVID 19 Pandemic has created quite the hustle and bustle across the global economy. People are jobless on a “global scale” and are going through an uncertain nature of living. Due to the deplorable situation, it is advised to maintain social distancing. Therefore, people have no option but to stay at home.
People are sitting next to their desktops and laptops more nowadays. They are constantly searching for ways to earn money online. Cryptocurrency comes here into the bigger picture.
Joblessness resulted in a bunch of new competitors in the market. This surge of new interest was also a consequence of the “Supreme Court” lifting the ban on trading. The new competitors somewhat show a percentage of retail investors as well.
The volume of trading cryptocurrency is quite powerful during the lockdown. According to Ajeet Khurana, the daily crypto-trading volume in India is $10-$30 million. Ajit is the CEO of Zebpay and also the head of the “Blockchain and Cryptocurrency Committee” of the “IAMAI”.
Due to this increased activity, fundamental activities can longer be overlooked. Entrepreneurs are thinking about entering this market of possibilities.
Cryptocurrency as a concept was unknown to many as of now. On the contrary, this lockdown has been testing the patience of all. People are utilizing their time at home by learning new things.
COVID-19 and Cryptocurrency – The Latest Developments
The pandemic has brought many financial researchers in the market to show their interests and word on it. The stock markets in Italy, Spain, the UK, France, and Iran remained unaffected. In China, COVID-19 brought a crash in the stock markets. The markets have become more unstable and dubious.
The Fluctuations Of The Digital Currency Market
It has been observed that the relationship between the COVID-19 deaths and cryptocurrency was negative initially. However, it became positive later. This directs the fluctuating-nature of the cryptocurrency market.
In Spite of the uncertainty, the year 2020 is considered to become the prime year for digital currency. Few prophecies can be made based on the observations. In the financial sector, there will be positive growth in blockchain. The technology of blockchain will be applicable to the sovereign countries. China will experiment in its city of Shenzhen. Another country to pose such an experiment in Sweden.
The blockchain space will function in integration. Half of the companies were not prepared to face such a crisis in the pandemic. Startups will also gear themselves up and enter this space of possibilities. Cryptocurrency will function more as unrelated options for investment. Initially, when the crisis hit on a global level, the stock market was related to digital currency for a very short span of time.
The fall in Bitcoins was a problem of liquidity. Gold also resembled such behavior. Therefore, this will drive people more towards blockchain. This pandemic has also increased the number of online gamers who can sit back at home and earn. This, in turn, will raise the online digital currency.
However, the cryptocurrency already had existing issues regarding illicit activities, regulations, etc. The problem of COVID-19 just adds to the list. Several companies are introducing new products, but the confusion still prevails. The administration needs to institutionalize it and make it much easier to buy. Amidst COVID-19, the demand for cash has not decreased much because it is backed by the administrative system.
Opportunities And Challenges Faced Regarding Cryptocurrencies
People can simply earn by completing various targets, tradings, surveys, mining, staking, etc. Individuals who are excellent at analyzing charts can make huge money simply through trading. It includes tremendous effort in analyzing and studying various technical charts.
Mining Digital Assets is also an option for earning online. The CPU (central-processing-unit) can mine with the help of certain coins only if there are enough personal computer cores. However, this method initially might charge a certain amount, and the computer can also become slow.
Freelance jobs, completing several tasks, and surveys are a great way to earn cryptocurrencies online. Individuals can collect airdrop tokens to simply earn profits. One can earn an airdrop token just by retweeting certain social media posts.
During the lockdown, people are not physically visiting shops that much. Hence, they are looking for online services. Therefore, goods can be sold online for cryptocurrencies.
Despite the fresh opportunities, there are certain challenges of Cryptocurrencies.
- Cryptocurrencies are not centralized, and therefore, the “Central bank” doesn’t have much control over it. This indicates that if a large economy adopts autonomous online currencies, then the RBI will have very limited tools to provide relief.
- Cryptocurrency fluctuates on a large scale. About 80% of the drop was recorded in September 2018. It becomes very difficult to consider such a fluctuating currency to be stable money for the country.
- The entire method is quite contradictory as to how the entire economy showers anybody who creates digital records. It promotes anonymity, which further enhances several illegal transactions.
Implications Concerning Cryptocurrency
Various implications can be drawn regarding cryptocurrency. For instance, what if someone takes a huge amount of loan and then sinks money into buying cryptocurrency. This record thus disappears from the official banking records.
Therefore, the person has no option but to flee to a different country. There he has to adopt a new identity altogether. Again, these can be used to fund terrorism as well. Additionally, a senior citizen uses his retirement money to buy a cryptocurrency and what if it drops by 80%. Thus, the question of banning cryptocurrency comes into account.
Banning doesn’t make the country lose its innovation. However, in adverse situations like the coronavirus pandemic, the cryptocurrency market’s aftermath can be extremely devastating.
The US does not consider cryptocurrency as their currency but only a commodity. Additionally, this consideration is done under extreme regulation from the Commodities Future Commission.
Unfortunately, India is nowhere in that situation. It lacks transparency and regulation. In this pandemic, the trading of cryptocurrency and its risk associated have risen directly proportional to each other.
Already, coronavirus has led to many people losing their jobs, basic facilities. Therefore, exposing oneself to the risk of buying digital currency will make matters worse.
Regularity Is A Necessity: If Not Regularized, Cryptocurrency Can Lead To Illegal Activities
Banning Cryptocurrencies have been the talk since last year itself from the Indian market. High risks, such as frivolity in prices, are constant. The month of March witnessed the approval of virtual currency by the supreme court.
Despite this, the administration could not bring any conclusions on the process of having proper regularization in this matter. Various committees are proposed by drafting two bills as well.
The nature of business today is highly uncertain. People are trading and taking actions without having any knowledge about the future. On the one hand, the trading volumes have risen. On the contrary, the lack of transparency on regulation is hampering the industry.
Before the ban, India was one of the top countries in this game. The market requires more transparency for competitors to come and engage in India. Presently, IAMAI (Internet-and-Mobile-Association-of-India) is operating to create a code-of-conduct for cryptocurrencies.
The online transaction of cryptocurrency will follow certain KYC procedures. Thus, this will ensure security and transparency in the system.