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The humanitarian crisis created by coronavirus has shocked the entire global economy. Industries like aviation, tourism, entertainment, and infrastructure are being affected the most by the virus. Apart from Italy and Iran, countries such as Spain, Germany, Africa, and Belgium are facing a major turmoil. According to a report by CNN, the crash of coronavirus has wiped out $9 trillion worth of stocks from the global market.
However, talking about bitcoin amid an economic crisis, it was fairly valued at $9000 as on 7th March 2020. Though continuous volatility has been observed in the price of cryptocurrency, it was something already presumed. As China is one of the leading countries working on cryptocurrency transactions and as the virus had the outbreak in Wuhan, their daily work got affected and thus a sudden surge in the value of crypto assets has been witnessed.
The resilience of banks in FinTech Industry
Banks from all over the world have undoubtedly got affected by the outbreak of coronavirus. As the shutters of banks are going down, they are realizing the potential of FinTech companies. Paul Geiger, President and Co-founder of Theorem Technologies, quoted that “FinTech companies are probably some of the best-equipped organizations to take on this crisis.”
Also many B2B and B2C companies are now of the view that banking is necessary for the growth of the economy but banks are not. Leveraging the potential of FinTech companies is the most you could make out in these scenarios. Reliance on crypto-based solutions such as blockchain-based payment, bitcoin wallet development, and coin/token development, will be adopted in the coming years.
Cryptocurrency- Gold 2.0
“Black Swan” is an event referred to as a random and extremely negative incident which in no way could be predicted earlier. A number of analysts view the spread of coronavirus as a black swan that has hit the modern world. Initially, it was viewed as a health crisis, but gradually all the companies got handicapped because of the shortage of supply from China and thus, all companies are running out of their inventories.
In such an unpredictable environment financial market acts differently. Traders and investors usually sell off their equities and invest in gold and US treasuries securities to minimize their risk factors. Similarly, in such a scenario, cryptocurrencies have also joined the asset class of safe haven. Thus it would not be wrong to classify them as Gold 2.0. Indeed, crypto assets saw some degree of volatility but more or less they have remained stable (notably, not as deeply affected as the prices of oil). Thus it would be further interesting to know how the market would unfold in the future.
A shift from paper to paperless economy
Going by the recent news, it is believed that coronavirus stays on objects for a longer duration of time, and if it comes in contact with a person, it may harm their well-being. Thus, by considering this scenario, Chinese authorities are quarantining their fiat currency to minimize the spread of the virus. Thus, an alternative solution needs to be devised at earliest as possible to maintain a proper trade flow. The use of bitcoin and other cryptocurrencies is expected to increase in these situations. Cryptocurrency solutions such as white label crypto wallet are the best fit as they are backed by blockchain technology and offer the best in terms of transparency and privacy of transactions.
Coronavirus is definitely not a permanent disaster to the crypto world. The history of bitcoin portrays that there have been numerous factors that led to the downfall of the crypto industry, but nothing succeeded. Political issues, hacks, scams, government regulations, economic depression are a few to list. Though it would be premature to assume that crypto assets would be the solution for the financial meltdown, certainly they have the potential to save the economic turmoil.
We, at Antier Solutions, provide crypto-friendly solutions including crypto exchange development, wallet development, P2P exchange, and lending platform development, and all-inclusive crypto banking solutions.
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