Bitcoin might not be the most stable asset out there, but it is more stable than some economies.
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The demand for cryptocurrency in certain countries is growing amid the COVID-19 pandemic. Bitcoin (BTC) peer-to-peer trading volume in Argentina, Chile, Venezuela and Morocco has peaked over the past few weeks, marking new all-time highs.
Additional reports suggest that traffic on centralized cryptocurrency exchanges has also peaked within the past few weeks, while major trading platforms such as Kraken and Coinbase have commenced hiring sprees due to increased customer interest. So, why exactly are people trading more crypto during the global lockdown, and where is this trend most apparent?
COVID-19 triggered a massive selldown
Like perhaps any other industry out there, the cryptocurrency market has been affected by the pandemic. However, the effects the virus has had on the sector are not entirely negative. While the price of Bitcoin plunged in March, it has since bounced back to its pre-crash levels. It is typical in a financial crisis to see some assets rise and fall during a short period of time.
Further, the virus has somewhat paradoxically offered more opportunities for crypto companies such as the United States-based exchange Kraken, which has recently added an extra 100 job openings in the wake of apparently elevated customer interest. “The traditional system seems to be completely breaking down all over the world,” Jesse Powell, the co-founder and CEO of Kraken, explained: “Increased customer demand is going to mean increased business for us, and it's going to mean increased hiring.”
San Francisco-headquartered Coinbase is also hiring dozens across its offices in the U.S., Europe and Asia. The company is apparently “full steam ahead,” executing on its 2020 strategy despite the looming economic crisis, as announced last month by the company’s CEO, Brian Armstrong. According to Armstrong, whose company reportedly saw as much as $1.3 billion in fiat and cryptocurrencies deposited into its wallets in just one day amid the March market crash, crypto might be the key component of a post-COVID-19 financial system.
Developing and challenged countries may be more reliant on crypto
But are people actually trading more crypto during the lockdown? It might be true in some countries such as Russia, where traffic on crypto exchanges reportedly surged 5.56% during the last week of March compared to February averages. Notably, the increased traffic numbers coincided with Russia’s first paid nonworking week, which was scheduled from March 28 through April 5 to mitigate the coronavirus outbreak.
However, there seems to be no data for centralized crypto exchanges in other countries, which makes it practically impossible to confirm the trend. The above-mentioned data from Coinbase and other exchanges seems to indicate that people were actively trading because of the price drop on Black Thursday, not due to the coronavirus outbreak.
The situation seems different in developing countries. Numbers obtained from LocalBitcoins, a popular peer-to-peer Bitcoin trading platform, seem to indicate that Bitcoin trade volume recently scored an all-time high in countries such as Argentina, Morocco and Venezuela.
Either way, crypto is popular
Even regardless of the trade volume, crypto has remained popular as a concept during the COVID-19 outbreak, according to data provided by the analytics and finance management startup The Tie. “Since the beginning of the year Bitcoin’s 30 day average tweet volume has increased by 16.5%,” the firm’s CEO, Joshua Frank, told Cointelegraph.
While the number of Bitcoin conversations on Twitter saw a decrease after Black Thursday, it has picked up pace due to the upcoming halving event, according to Frank. As a result, “Bitcoin sentiment is actually approaching the highest level we have seen in 2020.”
I have to know about cryptocurrency during lockdown and i found it interestin.. Though This pandemic affects crypto but may be have opened some Opportunity for us.