How Has Bitcoin Reacted to the COVID-19 Pandemic?

  • Bitcoin quickly found a natural bottom after the initial downturn.
  • When it reached its natural bottom, Bitcoin and other forms of cryptocurrency rebounded quickly.
  • During the succeeding weeks, the liquidity levels of Bitcoin normalized, following other forms of cryptocurrency.

The COVID-19 pandemic has impacted everyone. This pandemic has created a public health crisis that has also led to an economic crisis. Because of the serious nature of the virus, there are countless small businesses that have been forced to close, drying up their revenue streams. In an effort to cut costs, they have also had to lay off employees, leaving numerous individuals and families wondering how they are going to make ends meet.

The impact of this economic downturn has been felt at all trading markets. The New York Stock Exchange about the NASDAQ both felt a downturn at the start of the pandemic. Numerous international stock exchanges reacted in a similar fashion. Bitcoin and other cryptocurrencies also tumbled during the first few months of the pandemic.

The pandemic was absolutely ruthless on not only the global economy but also cryptocurrencies as well. Immediately after the pandemic started, Bitcoin quickly slid to a low that had not been seen in quite some time. There was even one day one Bitcoin fell close to 50 percent. The good news is that since that day, Bitcoin has rebounded nicely.

Since that time, Bitcoin has risen more than 130%. While this is great for Bitcoin traders, there are also some people that sold their cryptocurrency holdings at the start of downtown. After all, this is what sent Bitcoin tumbling in the beginning. There have been numerous reports written on how Bitcoin and other forms of cryptocurrency responded to the pandemic. There are a lot of people who believe that the initial tumble that was seen in Bitcoin was merely a reflection of the fear that was spreading to other markets.

Bitcoin markets have proven to be highly resilient.

Some of the other key points to note about the downturn of cryptocurrency include:

  • Bitcoin quickly found a natural bottom after the initial downturn.
  • When it reached its natural bottom, Bitcoin and other forms of cryptocurrency rebounded quickly.
  • During the succeeding weeks, the liquidity levels of Bitcoin normalized, following other forms of cryptocurrency.
  • Many analysts believe that this volatility was merely a reflection of market dislocation stemming from certain exogenous shocks.
  • Bitcoin markets have proven to be highly resilient.

These are just a few of the most important points that everyone has to keep in mind when it comes to Bitcoin and other forms of cryptocurrency.

It is important to note that the pandemic is going to be with us until we are able to find a vaccine. During this time, it should be expected that numerous markets are going to have issues remaining stable. Bitcoin thus far has proven resilient when compared to other forms of investments. It will be interesting to see what happens next.

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Jacob Maslow

The senior editor of Legal Scoops, Jacob Maslow, has founded several online newspapers including Daily Forex Report and Conservative Free Press. He also works as an Online Marketing Consultant providing web marketing services.
http://jacobmaslow.com

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