Since the global COVID pandemic, the entire financial world has changed. It’s hard to say which parts of the industry will come out stronger and which will be weaker, but one thing is certain: the cryptocurrency market has gotten more attention than ever. In numerous ways, investors, institutions, corporations, and working people everywhere have turned to crypto as a safe haven in a time of crisis.
Other reasons the COVID crisis has led to an uptick in cryptocurrency include the ease of buying it from home, the fact that ownership is anonymous, the fear that national governments are over-burdened with debt, and fears that inflation will continue to devalue traditional currencies. In fact, with each passing day, and even as the virus-related crisis subsides, people from all walks of life are discovering that there’s something quite unsafe about the old forms of money. The result is many are searching for alternative ways of investing, speculating, buying goods and services, paying bills, and transaction business. Maybe it took a worldwide crisis to highlight the advantages of non-traditional forms of money. Whether that’s a theory or not, the fact remains that investment in cryptocurrencies has been reaching record levels in the past few months. Here’s a closer look at some of the reasons that’s happening.
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New Firms are Pioneering Crypto Forms of Money
In dozens of nations, consumers and investors are looking for ways to have more control over their financial resources. Some of Asia’s biggest crypto-based financial institutions have hit on a unique way to leverage the power of non-traditional monies. They now offer clients the chance to borrow, lend, and save with cryptocurrency. Customers who do business in the crypto sector can borrow tokenized money and repay with the same. That’s just one of the ways that some of the world’s newest banks and non-traditional financiers are incorporating crypto into the mix. In a way, the entire definition of money is changing. The COVID crisis seems to have speeded up changes that were already in place.
Government Debt
Consumers, institutions, and investors have long been concerned about the high levels of government debt in the U.S., Japan, and elsewhere. How strong can the dollar be, they wonder, is the U.S. Treasury is buried in interest payments on what it already owes? For many conservative investors, the answer is a new type of currency that is not tied to any national government, corporation, or person.
Familiarity
Timing has been a key factor in the growth of non-traditional forms of money. Bitcoin and several other highly popular coins are no longer new, unusual assets. They’ve been around long enough that the curiosity factor has given way to trust and familiarity. Less than a decade ago, you’d be hard put to find an institution or individual that thought of cryptocurrency as a wise portfolio component. That attitude has undergone a major change since COVID revealed how tenuous the traditional financial markets were. Brokers are now quite accustomed to hearing new clients ask about buying and selling crypto. Millions of people now trade cryptocurrency for capital gains in their regular brokerage accounts.
Remote Payment Methods
With being stuck at home during the pandemic, there was an increased demand for remote methods of payment. Unlike developed economies, emerging nations don’t always have the infrastructure to handle massive volumes of credit card payments. Besides, in some nations just having a credit card is a rarity. It may have taken a worldwide viral emergency to demonstrate the inherent usefulness of cryptocurrencies. Even in developed nations, crypto is a lightning-fast and highly convenient way to pay remotely. As more and more e-commerce companies do 100 percent of their business online, non-traditional forms of payment will become more common.
Privacy
Credit cards are about as far removed from the concept of privacy as you can get. Every transaction leaves a detailed trail of amounts, times, goods, services, identities, and more. For working adults who are growing tired of having their every move watched, recorded, and monitored by snooping governments and banks, cryptocurrency is a breath of fresh air. It offers total anonymity in a world that is rapidly become surveillance-based.
Inflation and Instability
In several South American nations, inflation is so pervasive that workers spend their paychecks as quickly as possible, hoping to stock up on necessities before prices rise further then next day. Non-traditional forms of value, like crypto, offer a solution to national inflation and government instability. That’s because values aren’t pegged to the health or wealth of local treasuries, nor are they susceptible to regional monetary crises.