Home Crypto News How will Bitcoin Perform after the COVID-19 Crisis has Passed?

How will Bitcoin Perform after the COVID-19 Crisis has Passed?

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Globalisation and fashionable expertise have arguably allowed the COVID-19 virus to unfold like wildfire, threatening to burn the very basis of our financial system.

As nations start to really feel the pressure, printing more cash in a bid to stimulate the financial system will be the resolution of many. Although this strategy might clear up some quick points, it will undoubtedly decrease the worth of fiat forex.

To achieve a greater understanding of COVID’s impression on Bitcoin, we interviewed a few of the biggest minds and consultants who function at the high tiers of the cryptocurrency trade and are recognised as main authorities of their respective fields.

Here, we will study their view on how the world would possibly look publish COVID-19 and the way Bitcoin will be built-in inside our world monetary construction.

Meet the Experts

Yoni Assia – CEO of eToro

Yoni is the CEO of eToro, the world’s largest social funding community. He has proven an curiosity in finance and laptop science since his youth and so determined to merge his passions. It was this very ardour together with the social revolution, which led to the founding and improvement of eToro’s funding community, the place customers join, share, commerce and spend money on the world’s monetary markets. Yoni is as enthusiastic about his enterprise, as he’s for his household, spouse plus 4 youngsters, which regularly ends in extreme use of the phrase superior, and hi-fives round the workplace. It’s this younger CEO’s imaginative and prescient to disrupt the previous banking trade and substitute it with a brand new on-line clear and social monetary system for the profit for everybody. Yoni is a member of the YPO, and was included by Financial News in its prestigious Fintech 40 rating and by City A.M. as a Fintech 100 high influencer.  Yoni holds a B.Sc. in Computer Science and Management and an MSC in Computer Sciences.

Simon Peters, eToro market analyst and crypto skilled

Simon is a cryptoasset analyst at eToro, with an in depth information of crypto markets and the crypto trade. In his function at eToro, he additionally helps HNW shoppers with their investments in cryptoassets. Simon has a level from Brunel University London in Mechanical Engineering, and has a CFA UK Level 4 Certificate in Investment Management.

Ciara Sun, Head of Global Markets at Huobi Group

Ciara Sun oversees the firm’s world growth throughout numerous enterprise segments, together with world institutional enterprise, rising markets, and extra. She is extremely skilled in monetary evaluation, strategic consulting, and company administration, having labored throughout multinational consulting corporations reminiscent of Boston Consulting Group, Deloitte Consulting, and Ernst & Young.

Prior to Huobi, she suggested Banking and Capital Markets teams for 15 main banks and carried out funding analytics to help shoppers with billions of {dollars} of AUM, together with hedge funds, personal fairness corporations, and funding administration firms. She holds an MBA in Financial Analysis.

Wayne Chen

Wayne Chen is CEO of Interlapse and Founder of digital forex platform, Coincurve. Wayne is an early adopter and investor in Bitcoin, Blockchain and cryptocurrencies. Previously as Senior Director, Head of Product at nCrypt (previously nTrust), he designed and developed one among the first Bitcoin pockets and Exchanges in Canada.

Jerry Chan

A 15-year veteran of Wall Street expertise, Jerry Chan is now CEO of BSV blockchain service supplier, TAAL. Jerry’s imaginative and prescient is that blockchain applied sciences will revolutionise the present monetary and financial markets, kickstarting a brand new period of monetisation of the web.

How has the coronavirus impacted cryptocurrency initiatives?

With blockchain being such a nascent expertise, there are a whole lot of crypto initiatives that will by no means get off the floor in mild of the present pandemic. However, another initiatives have undoubtedly elevated in relevance as the disaster has continued to unfold.

Yoni Assia, CEO of eToro, identifies COVID-19 as the trigger for an unprecedented world market downturn, the impact of which was initially felt in the crypto sphere together with the conventional markets. As time progressed, nevertheless, he has seen increasingly more buyers flip towards Bitcoin.

Yoni acknowledged, “Since measures were announced by the Federal Reserve to introduce unlimited quantitative easing in an attempt to stem the downward spiral of global economies, many investors have turned to Bitcoin as a hedge against a depreciating dollar.”

Yoni additionally believes that the pandemic has led to plenty of curiosity in a Universal Basic Income (UBI). “eToro sponsors a project called GoodDollar whose goal is to produce a framework for delivering global, sustainable, and scalable universal basic income through blockchain technology.” 

GoodDollar is an impressed concept that incentivises new customers to enter the digital asset house by giving freely small quantities of primary revenue, making certain that everyone has entry to some type of digital asset. Yoni has at all times perceived the unfair distribution of wealth as the most crucial of financial challenges. He feels that the coronavirus could be the catalyst that compels us to take care of this necessary social subject.

Jerry Chan acknowledged that “the biggest impact is the shutdown of import and export and general freedom of movement of goods and people between countries. This has a severe impact on the ability of a global hashing data centre operation to be able to manage and grow its fleet.”

Ciara Sun shares an identical view with Yoni concerning quantitative easing. She additionally added, “Beyond the validation for cryptocurrency projects, coronavirus has helped the best projects rise to the top as the weaker ones are weeded out. Mirroring the traditional startup ecosystem, the current economic environment is highlighting weaknesses in the business models of many crypto and blockchain projects. As a result, we will come out of this with a much more sustainable crypto ecosystem that’s driven by a project’s actual value and contribution to the ecosystem rather than market hype and speculation.”

And so, whereas the coronavirus has prompted an excessive amount of hardship for a lot of industries all through the world. For cryptocurrency, it appears to be separating the wheat from the chaff. Projects which have a weaker basis will battle. In distinction, the extra well-established cash with elevated relevance will proceed to draw those that want to defend their cash from an impending recession.

Do you suppose the coronavirus has supported or discredited the concept of Bitcoin as a ‘safe haven’ asset?

There has been a blended bag of opinions lately over whether or not Bitcoin has grow to be the ‘safe haven’ it has typically been described as.

Simon Peters, market analyst for eToro agrees with eToro CEO Yoni Assia, that at the begin of the pandemic, cryptocurrency market costs appeared to coalesce with conventional shares and fiat, however then a shift passed off.

“Interestingly, this is backed-up by eToro’s platform data, which shows a 77% increase in new registrants whose first action was to invest in Bitcoin. As the price of Bitcoin is travelling in the same direction as gold, you could argue investors view it as a safe haven asset.” 

Peters additionally reminded us that Bitcoin shares related traits with gold. They every have a finite provide, each are decentralised, and neither are negatively affected by inflation. Bitcoin prices a lot much less to retailer and is extra simply divisible. Peters added, “Bitcoin requires vault-like storage to protect it from thieves, but it only ever takes up data. Therefore, it is unsurprising that Bitcoin is commonly referred to as digital gold.”

Jerry Chan and Wayne Chen had differing opinions on this query. Chan informed us, “The coronavirus has certainly contributed to discrediting the idea of Bitcoin as a ‘safe haven’ asset in my view. While Bitcoin was expected to be a ‘flight to quality’ asset, much like gold, it declined in line with the stock markets, which has led to increased mistrust.”

Whereas Chen acknowledged, “The coronavirus has undoubtedly supported Bitcoin as a safe haven and a store-of-value asset. During any economic uncertainty, people immediately divert to alternative assets such as gold, and now Bitcoin to prevent currency erosion.”

Finally, we flip to Ciara Sun to see if she may settle the debate. Sun agreed with Peters, stating that Bitcoin had outperformed conventional markets like the S&P 500 on a number of events, revealing that cryptocurrency can, and infrequently does, “decouple from macroeconomic movements.” 

She cited Paul Tudor Jones as a primary instance, who lately declared that “he has 1-2% of his portfolio invested in Bitcoin.” Ciara acknowledged the fact behind Jerry Chan’s view, however went on to say that after the preliminary drop in worth, Bitcoin had recovered. “Shortly after the March crash, there was some doubt from the traditional finance sector, but the ensuing weeks have proven Bitcoin to be quite resilient.”

2020 is probably a giant 12 months for cryptocurrency. The financial impression of the lockdown, the extremely anticipated halving occasion, and even a US election due at the finish of the 12 months. In what manner may all this affect Bitcoin for 2021, when it comes to each value and mining?

 

Peters believes that halving the block reward might even see a “proportion of mining operations switch their hash power to mine similar cryptos such as Bitcoin Cash and Bitcoin SV” to stay worthwhile.

He feels {that a} dip in community hash price for Bitcoin will be short-lived; nevertheless, most miners in international locations like China will nonetheless run at a revenue and look to scale up their operations. Peters additionally mirrored on current occasions, “Combining what’s happening on the global financial stage, with the Bitcoin halving, and crypto asset education levels increasing among investors thanks to more media coverage, this could provide the perfect storm for Bitcoin prices to reach new highs in the next 12 to 18 months.”

CEO of Interlapse, Wayne Chen believes that mining hash charges which have lately hit all-time highs reveals nice confidence for Bitcoin. Chen additionally regarded to the previous efficiency of the main cryptocurrency after earlier halvings passed off, stating, “Historically, Bitcoin prices always surge significantly following a halving event. The increase may not be immediate but will likely be guaranteed until the next halving.”

Jerry Chan believes that “2020 will be a massive year of transformation in mining.” Validating a degree already raised by Simon Peters, Chan introduced that TAAL has “seen a massive influx of miners shift to BSV.” The blockchain service supplier had processed a record-breaking 309MB block on Bitcoin SV, containing 1.1 million transactions in the week earlier than this interview passed off.

Ciara Sun feels that it’s troublesome to foretell the state of the market subsequent 12 months. However, she does suppose that the way forward for Bitcoin seems promising, “given the current economic environment.” 

Do you suppose that the COVID-19 pandemic has highlighted an actual want for cryptocurrency and blockchain expertise?

Yoni Assia believes that the unprecedented points that arose throughout the unfold of COVID-19 has allowed us to “see how blockchain technology and crypto assets could be used in the financial system of the future.” He additionally acknowledged that ‘Fed Dollars’ may have been extra simply deployed to a ‘Fed Wallet’ via which cash may have been despatched to individuals with out the want of utilizing separate banks and accounts.

He opined that, “worries over inflationary currencies like the USD dollar caused by unlimited quantitative easing measures have also provided impetus for using deflationary cryptocurrencies instead. Furthermore, furlough schemes around the world have brought the topic of UBI to the fore, similar to the GoodDollar project eToro has funded.”

Wayne Chen feels that the pandemic has thrust Bitcoin into the highlight as each a store-of-value and a world, borderless forex. He described a possible short-term consequence the place fiat would shortly lose worth, whereas different altcoins would “follow Bitcoin’s dominating precedence.”

Jerry Chan believes that the actual profit that has been highlighted by the COVID-19 disaster lies in the all however limitless use circumstances of blockchain expertise.  He acknowledged that “pharmaceutical companies have realised the potential application of a scalable version of Bitcoin blockchain, which can be used to track COVID-19 testing and vaccination records, cross-state and cross-borders, in a way which could be used to corroborate or validate statistics submitted to global health organisations.”

Ciara Sun agreed with this level, feeling that “healthcare organisations, governments, non-profit organisations and private enterprises struggle to efficiently collaborate on coronavirus response efforts.” From a financial viewpoint, she added that “cryptocurrencies are a vital part of the cashless economy that is being accelerated by the pandemic.”

Which cryptocurrencies do you count on to outlive and flourish after the hazard of the virus has handed?

Simon Peters was fast to remind us that “it’s important to distinguish that not all cryptos are cryptocurrencies, some [are used as a] different utility rather than used as a medium of value exchange.”

He is of the opinion that the main cryptocurrencies, reminiscent of Bitcoin and Ethereum will stay and flourish after the hazard from the virus has handed, believing that these with giant market capitalisation or “unique use cases” are right here to remain. The similar might be stated for these initiatives which have “the most development activity taking place.” 

Peters additionally acknowledged that relying on funding construction, a few of the smaller, niche-based blockchain startups might not have the sources to outlive. Venture Capitalists are prone to be reluctant to spend money on these higher-risk corporations.

Jerry Chan categorically states that the coin to observe is Bitcoin SV as he feels that “it is the only version of Bitcoin that is scalable.” Wayne Chen disagrees, believing that the pioneer and nonetheless main Bitcoin will retain its quantity 1 spot and proceed to flourish.

Ciara Sun acknowledged that she doesn’t “speculate on the future of specific cryptocurrencies.” Still, she added that it’s “those which have the strongest community base, most robust blockchain infrastructure and scalable token economics” that may be prone to carry out properly in the long run.

This article has been written completely by Coin Journal author, Chris Roper, with direct quotes taken from 1:1 interviews carried out in May, 2020. 

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