An Analysis of Cryptocurrency in Crisis times of COVID 19.

Cryptocurrency is an internet-based medium of exchange which uses cryptographical functions to conduct financial transactions.  Cryptocurrencies leverage BlockChain Technology to gain decentralization, transparency, and immutability. Bitcoin, created in 2009 was the first decentralized cryptocurrency. These are frequently called altcoins as a blend of alternative coins.  Bitcoin and its derivatives use decentralized control as opposed to centralized electronic money and central banking systems.

Although people refer to bitcoin as a decentralized digital currency, I prefer to think of it as an electronic asset, to sidestep questions around which government backs it and who sets the interest rates, which are often a mental block in understanding bitcoin. As an electronic asset, you can buy bitcoins, own them, and send them to someone else.

What is the value of cryptocurrencies? On the one hand, cryptocurrencies should be able to ease financial transactions through elimination of the intermediaries, reduction of transaction costs, accessibility to everyone connected to the Internet, greater privacy and security.

A key development in the rise of cryptocurrencies and other cryptoassets has been the emergence of crypto exchanges where anyone can open accounts and trade cryptoassets both against each other and against fiat currencies. In a survey by Hileman and Rauchs (2017), the US dollar, the Euro and the British Pound are currently most widely traded against cryptocurrencies, while the importance of the Chinese Renminbi (CNY) significantly diminished after the tightening of the regulation by the People’s Bank of China; about three-quarters of large exchanges provide trading support for two or more cryptocurrencies.

Crypto exchanges provide extensive cryptocurrency pricing and trading information in the public domain. The emergence of these exchanges has created an entire ‘ecosystem’ of services and participants, seeking to provide liquidity, exploit price discrepancies for-profit and to support investment by both retail and professional investors.

The Future of Cryptocurrency

Some economic analysts predict a big change in crypto is forthcoming as institutional money enters the market. Moreover, there is the possibility that crypto will be floated on the Nasdaq, which would further add credibility to blockchain and its uses as an alternative to conventional currencies. Some predict that all that crypto needs are a verified exchange-traded fund (ETF). An ETF would make it easier for people to invest in Bitcoin, but there needs to be the demand to want to invest in crypto, which some say may not automatically be generated with a fund.

Some of the limitations that cryptocurrencies presently face – such as the fact that one’s digital fortune can be erased by a computer crash, or that a virtual vault may be ransacked by a hacker – may be overcome in time through technological advances. What will be harder to surmount is the basic paradox that bedevils cryptocurrencies – the more popular they become, the more regulation and government scrutiny they are likely to attract, which erodes the fundamental premise for their existence.

While the number of merchants who accept cryptocurrencies has steadily increased, they are still very much in the minority. For cryptocurrencies to become more widely used, they have to first gain widespread acceptance among consumers. However, their relative complexity compared to conventional currencies will likely deter most people, except for the technologically adept.

A cryptocurrency that aspires to become part of the mainstream financial system may have to satisfy widely divergent criteria. It would need to be mathematically complex (to avoid fraud and hacker attacks) but easy for consumers to understand; decentralized but with adequate consumer safeguards and protection; and preserve user anonymity without being a conduit of tax evasion money laundering and other nefarious activities. Since these are formidable criteria to satisfy, is it possible that the most popular cryptocurrency in a few years could have attributes that fall in between heavily-regulated fiat currencies and today’s cryptocurrencies? While that possibility looks remote, there is little doubt that as the leading cryptocurrency at present, Bitcoin’s success (or lack thereof) in dealing with the challenges it faces may determine the fortunes of other cryptocurrencies in the years ahead.

TOP 5 CRYPTOCURRENCIES TO INVEST DURING COVID 19 PANDEMIC.

Investing in cryptocurrencies has always been a hot trend among traders around the world. However, it may be rather difficult to choose the best cryptocurrencies to invest in especially for beginners.

The coronavirus (Covid-19) has affected the entire financial market. Even the crypto industry could not escape from the outbreak, witnessing the leading cryptocurrency Bitcoin shedding 58 percent and falling from $10,500 to $4,679. Shortly after the sudden decline in BTC price, search engines such as Baidu and Google saw an increased interest in buying Bitcoin. 

Meanwhile, Changpeng Zhao, the CEO of Binance, said in an interview that he disagrees with the fact that the virus caused the crash, putting the blame mainly on the overall market sentiment and adding that the coin’s fundamentals still look strong. 

Meanwhile, global crypto conferences have either been canceled or postponed to stop the spread of the pandemic. Consensus 2020, one of the largest events in the crypto industry planned for this May, will now be held virtually, giving attendees from all over the world the opportunity to participate online at no charge.

Apart from the coronavirus, there is a piece of good news about crypto regulation in some countries such as India, Iran, and Venezuela, which at first were against the adoption of crypto but are now finally embracing it. Also, Zimbabwe’s government appears to be interested in legalizing digital money to improve its financial sector. Moreover, according to the latest data from Statista, the popularity of cryptocurrencies is rapidly growing in Colombia, making the country the third-largest zone of crypto users.

Below is the compilation of a list of the top cryptocurrencies to invest during COVID 19, based on their latest developments, price performance and analysts’ predictions.

1. Bitcoin (BTC)

Bitcoin still retains its position on top of the most popular and profitable digital assets. 

Although it suffered a temporary setback when its value dropped from $10,000 in mid-February to $4,000 in mid-March, the coin has still managed to gradually appreciate back to $6,298. 

According to a famous cryptocurrency and Bitcoin investor Tyler Winklevoss, the digital asset is expected to gain more in value as people across the globe get over the initial shock of the deadly pandemic. 

However, BTC seems to have the natural tendency to spike up whenever “it bottoms out”. Thus, it is expected that the coin will live up to its reputation once again in the coming months, making it the top crypto to invest in April.

2. Ethereum (ETH)

Ethereum has always maintained its status as another profitable digital coin for investors. At the time of writing, it traded near the starting point of the $125.00-$131.59 range. Analysts are predicting that it is not going to remain at this level for long, expecting the coin to see another uptrend sooner than later.

Between December 18, 2018, and February 6, 2020, Ether has experienced an almost 100 percent appreciation. It climbed from $115.95 up to $220.81 per coin within the period, making it a great choice for crypto enthusiasts who have invested in this altcoin at the right time.

Two major factors are likely to contribute to this asset’s potential growth, making it one of the best cryptocurrencies to invest in April 2020. These are: 

  • Projected ETH2.0 launch.

The crypto industry is expecting Ethereum to launch the 2.0 version in, July 2020 with the project’s researcher, Justin Drake, being very optimistic about the event finally happening.

  • An increasing number of miners are accumulating this coin.

Santiment’s founder, Maksim Balashevich, expressed his views saying that the alarming rate at which miners are accumulating the coin is proof of the level of confidence they have in it. This may also continue to push the crypto’s value up in the coming months and years.

3. Ripple (XRP)

Unlike most digital currencies that target individuals, Ripple was created as a payment alternative to banks and other large financial institutions. Although Bitcoin remains the number-one digital currency, XRP is another popular investment option among modern traders.

Currently,  XRP is trading between $0.16640-$0.18019. Analysts are predicting a bull run to $0.21608 if the price goes above $0.17468.

Isn’t it ironic that the institution that was determined to see the end of digital currencies, Ripple inclusive, is at the forefront of its usage? That is one of the significant reasons why investing in this digital asset may not be a bad idea.

4. Tron (TRX)

Tron is one of the newest kids on the block. It was created in 2017 and has continued its astronomical appreciation since its launch.

At the time of its launch in September 2017, it was sold for 1 cent and had a market capitalization above $70m. It quickly attracted many cryptocurrency investors, boosting its price to 6 cents three months later. In 2018, the project became a huge success, as evidenced by the impressive market cap that ranked it among the top 15 cryptocurrencies in the world.

On March 27, 2020, the price of TRX reached $0.0119. Some analysts anticipated that it could achieve the $0.012 level. At the time of writing, it traded at $0.011.

Recently, Tron has partnered with Metal Pay, a cryptocurrency service provider, which indicates a more frequent purchase of TRX in the United States.

Some investment experts predict that the coin would hit $40 by the year’s end. Going by its appreciation history, it may come to pass. 

5. Bitcoin Cash (BCH)

Bitcoin Cash is a member of the Bitcoin family. It is another worthy investment option if you are looking for crypto to add to your portfolio. It was introduced as a Bitcoin fork in 2017 and has since justified its creation. 

Bitcoin Cash makes the list of cryptocurrencies to invest in April 2020 and beyond. This is because of its potential to appreciate significantly during this year.

Although the digital currency started at $204 at the beginning of January, it currently stands at $217 while experts forecast a rise to $350 at the end of the year.

Crypto market forecast for April 2020

Cryptocurrency experts around the globe are almost unanimous in their predictions. A lot of them believe that all the major cryptocurrencies will be back on track soon, living up to their bullish forecasts. Meanwhile, the latest crypto market review indicates some positive trends and news that are likely to boost the valuations of digital money too.  

Hence, digital asset investors can leverage this potential for the appreciation to invest in the top cryptocurrencies mentioned above.

Conclusively, Investing in cryptocurrencies can be a highly profitable business opportunity, but you have to be able to follow the latest market trends and understand how to buy or sell on time.

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