Because of the Coronavirus, will Bitcoin become a means of protecting wealth

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The continuing global turmoil, like the exacerbation of the conflict between Washington and Tehran, and therefore the spread of the new Corona virus in China, contributed to the expansion of cryptocurrencies. For these reasons et al. , some experts today believe that Bitcoin (the hottest electronic currency) can perform an asset protection function, if it turns into a protective asset.

In a report published by the Russian site "News Re", writer Mikhail Ismayilov said that regulators round the world are still unable to define what the cryptocurrency and its essence mean.

Some believe that cryptocurrencies are a true and complete force, others consider them to be just a way of payment, while others see them as a threat that exacerbates criminal activities round the world.

However, the increase and fall of the worth of digital currencies has not only affected the minds of novice traders but also experienced players within the market.


The idea that Bitcoin plays the role of a protective asset is promoted primarily by those that trade cryptocurrencies, but actually , things don't compute like this, as for Bitcoin to perform this function must regulate the status of the digital currency at the legislative level, and thus all speculation Which flows during this direction seem unrealistic or biased, consistent with the author .

The writer quoted Jan Art, an expert within the Financial Market Committee of the State Duma, that the mention Bitcoin as a protective asset is simply rumors aimed toward promoting this cryptocurrency.

According to the author, the preventive asset has three basic characteristics, which are the need to be "traditional and familiar, recognized" by all the regulators within the world, additionally to the need of high liquidity.

In fact, for obvious reasons, cryptocurrencies don't have these properties yet, and it might be naive to attend for them to possess them.

According to the author, digital currencies won't replace investment tools the maximum amount as they're going to replace payment methods (Getty Images)


Perhaps the second characteristic, which can be recognized by regulators this year, are going to be considered.

And the experience of Singapore and Switzerland - the author adds - is especially interesting, but the important motive for recognizing cryptocurrencies remains to make sure that these currencies are placed within the us .

Additionally, security and respect for property rights are important to hedge assets. during this regard, cryptocurrencies are still very weak, says the author .

The writer also said, "I think that digital currencies within the end won't replace investment tools the maximum amount as they're going to replace means of payment, but this issue remains under discussion."

"Central banks round the world will search for consensus in a method or another, and that they will ultimately reach a choice of partial ban," he said.

At an equivalent time, the State Duma may adopt the primary steps within the legal regulation of the crypto market this spring, especially since the cryptocurrency market is one among the foremost preferred areas at the instant .


It is clear that Bitcoin will experience some volatility this year, and its value may decline, and therefore the main volatility factor are going to be the circulation of data about the methods of regulating cryptocurrencies in several countries.

The writer believes that the cryptocurrency as a tool only interests speculators, professionals and enthusiasts, and not long-term investors.

As for as a way of payment - the author says - the utilization of digital currencies will truly double, and this use will grow in large quantities even within the absence of legislation that regulates exchanges against cryptocurrencies.

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