2020 started quite unexpectedly for all of us. In the second half of January it was louder and louder about the pandemic spreading all over the world. Even then, most investors in the world did not think about the impending crash in the global markets. The first major drops began on February 24, 2020, and culminated on March 12, 2020. What has changed since then?
Cryptocurrencies in the age of a pandemic – an opportunity or a risk?
A year has passed since the spread of the SARS-COV-2 virus, which causes the COVID-19 disease. During this time, the world of digital currencies and global stock markets felt what a real rollercoaster of emotions. When the world circulated photos of Iran’s deputy health minister, wiping sweat from his forehead during a press conference, and the next day it turned out that he was infected with coronavirus, the world began to reign anxiety. On February 24, declines began in both the stock and cryptocurrency markets. While the prices did not fall too much on the first day, in the following days we had to deal with a collapse or a crash. Stock indices and cryptocurrencies recorded their maximum lows on March 12-13. From there, they gradually began to revert to their pre-downtrend valuations. There was a slight recovery in the cryptocurrency markets. Probably due to the fact that many people stayed at home and had more time to be interested in investments and topics for which they had not found time so far. In the spring, the market of encrypted electronic currencies and stock markets began to recover slightly, and then more and more dynamic increases in the prices of individual securities.
Buying cryptocurrencies during the ongoing coronavirus pandemic
Where many panicked and frantically sold their assets, many investors saw a good opportunity. On March 12, Bitcoin’s price dropped to a very low level of $ 5,000 apiece. On March 13, this price dropped for a while to the level of $ 4,000 for 1 Bitcoin. Since then, the price of Bitcoin has continued to increase. It has recently even come close to historical highs and has reached a price of $ 19,700. This means that by buying 1 Bitcoin on March 13 for $ 4,000, you could earn nearly 500% in 9 months! Awesome. This rate of return is very rare. The return on investment was similar with Ethereum. On March 13, 2020, they could be purchased for less than $ 100, and at the time of writing this article, their price is around $ 600, which would mean a return on investment of nearly 600 percent in 9 months. The situation was similar with Monero, which had more than regained its value in spring. This period was probably the best time to buy cryptocurrencies in recent years. Whoever did not use this opportunity to buy digital currencies may regret today.
What’s next? Will cryptocurrency prices continue to rise?
As you can see from the examples presented, it has been possible to earn a lot on cryptocurrencies in recent months. Will the price increases continue? It’s hard to clearly answer such a question in such a volatile and unstable market as cryptocurrencies. While the oldest and most famous projects, such as the aforementioned Ethereum or Bitcoin, have been climbing up in recent weeks, the same cannot be said about less known projects, i.e. Altcoinach. They still have a lot to prove and make up for several years of losses from the highs from the boom at the turn of 2017 and 2018. For example, digital currencies such as Bitcoin Cash, Gold and BSV as well as Lisk, Ripple, Tron, NEO or EOS may still have the best ahead. It is similar with other, slightly less known, but equally ambitious projects such as Enjin Coin, Cardano, Dash or ChainLink. Technically, they look very promising and their capitalization (the market value of all coins) is still quite low.
At this point, we are dealing with an unprecedented re-printing of classical money. It aims to “save economies” from the consequences of closing countries. Such a process will surely have one important consequence. Inflation! Yes! Probably in spring next year, the prices of all goods and services will start to rise. So it is possible that the enormous printing of money will also raise the prices of shares and cryptocurrencies.
If you are looking for investment opportunities in a difficult pandemic period, you are probably also considering buying cryptocurrencies. We are currently dealing with a kind of “coronavirus boom”. The rebound has been taking place since mid-March this year. Some cryptocurrency projects have not yet regained even some of their previous capitalization values, and the charts are steadily climbing up. If the process of reprinting money continues, and the economists’ forecasts that we will not feel real inflation until Q2 2021, then we may have a continuation of the current trend in many projects. Of course, there is no guarantee for this. Remember that investing in assets such as cryptocurrencies is very risky and may result in the loss of some or all of your capital. Therefore, please do not treat the information in this article as investment guidelines and advice in accordance with applicable regulations, but only a subjective opinion of the author, which may not be true.