No matter in which part of the world you live in, the COVID-19 outbreak has affected your life in one or another. The virus has plundered and destabilized the world in less than a few months. The virus has not only posed a threat to the health of humans but their wealth too. Well-established businesses are collapsing, the economic power of the countries is being shaken, all sectors of the businesses are severely hit and crypto world is no exception.
Here is how COVID-19 is affecting the crypto world:
1. The Prices Have Dropped Drastically.
As people are in panic after the markets have closed down, businesses have been shut and economic activities have come to a halt, the crypto market is experiencing a downturn. The price of the Bitcoin had dropped drastically, and Altcoins have also been hit hard. Although crypto assets have recovered some losses, still smaller projects are hit by the wave.
2. Raising Capital is Harder and More Challenging.
Initial Coin Offering (ICO) market has collapsed, which had made raising of the capital a difficult and hard task. Now, startups are looking forward to VCs to raise the funds. However, uncertainties that come with coronavirus pandemic and social distancing measures, raising capital seem impossibly hard task presently in the crypto world.
3. Crypto Conference Had Been Cancelled.
As the self-isolation instructions were issued by the governments around the world, the first handful of conferences of Blockchain were canceled. Although these conferences can be hosted online, the conference organizers and hosts will be hit hard by the cancellations. They will suffer a huge financial crisis until the time coronavirus pandemic is defeated by humanity worldwide.
4. Remote Working is the Norm of the Industry.
This is a positive effect of the coronavirus that has further improved the remote working style of the crypto world.
The crypto-currency world already worked remotely, and its infrastructure of remote working was long ago built. While the world businesses are building its remote working style, the crypto world is improving its standards and already working excellently. However it is not possible everywhere and Startups are going to feel losses due to this.
5. Stablecoins are rising.
The use of the Stablecoins has increased drastically over the past few weeks as the pandemic of the coronavirus began. As a result investors are moving their funds into Stablecoins when the risky assets collapsed.
Two Stablecoins – Tether USD (USDT) and USD Coin (USDC) – have witnessed increased inflows over the past few weeks.
Smaller coins such as Binance USD (BUSD) or Paxo Standard (PAX) have also witnessed increased inflow and improved their ranking on the through market capitalization.
6. DeFi Market
DeFi is also experiencing worse impacts of the COVID-19 in the digital assets market. The total value of funds had witnessed a drastic and major drop of 50% in decentralized finance protocol from all high $1.2 billion in February to $633 million today.
Crypto market has experienced downsizing effects of the COVID-19. No one knows when will coronavirus impact would end, but crypto market has stayed strong and rise again after falling, This time due to the effect on the economy it may be slow but optimism in the crypto market is already high.