The Impact of Coronavirus on Crypto Coins and Countries’ Breakthroughs

A number of events that occurred in the first months of 2020 and affected international relations created upward mobility
in the crypto coins
. Bitcoin, which climbed after the tension between the US and Iran, pulled other crypto coins up one after the other. As a result of the geopolitical turmoil experienced in the continuation of the process, the assets of individual and institutional investors turned to crypto coins, which are more protected and usable in every region. In the face of crypto coins, which created a new peak in volume in a short time, the share market began to decline.

While all these events were happening, the increase in uncertainty with the coronavirus outbreak spreading from Wuhan, China, increased the reputation of crypto coins. Countries that have to assess the situation every day have become public discussors of digital currencies and their areas of use in many meetings, including the G-20 Summit. With the spread of the virus, the global economy began to stagnate, and in order to save the economy, central banks, including the Fed, began to implement a policy of interest rate cuts. Following the Fed’s abrupt decision, Australia and Malaysia took similar steps. 

Although it was said by one group that these steps would not be effective in the medium term and could have a negative impact, a different group claimed that they could be expected to have a positive impact on the economy as they would support consumers in getting and spending credit in the short term. Although the economic recession and uncertainty environment had a negative impact on the crypto coins for a while due to the economy, it was seen that the crypto coins held above the important support levels. On the other hand, as a result of the air gaps to be created in the economy, the shrinking volume of crypto coins is expected to increase again.

There are several reasons why economic easing and geopolitical turmoil can have a positive impact on cryptocurrencies. In line with the researches, it is possible that the coronavirus is permanent on the cash money circulating from hand to hand and is transmitted in this way. Government officials, experts and health organizations issued statements on the issue and warned their citizens about the use of money and hygiene. The World Health Organization (WHO) has warned about the use of banknotes, advising individuals about contactless payment. In this context, China, as the country where the virus is spreading, has used blockchain technology in various areas to fend off the virus, thus reducing the risk of contact and benefiting from time savings. Thus, at the end of January 2020, 29 blockchain applications fighting the coronavirus were published in China. On the other hand, many countries have started to take steps quickly when it comes to the digital use of money. Germany’s Federal Financial Supervisory Authority (BaFin) has defined all types of digital currencies as financial products and accepts them as a means of payment. Following this news, nearly 40 banks applied for licenses. The U.S. Treasury Department held a meeting on cryptocurrencies and sought opinions from compliance experts, calling for “we should not lag behind countries” as long as the details are well researched. In particular, Treasury Secretary Steven Mnuchin is known to have personally attended the meeting and supported the issue. On the other hand, it is known that the Reserve Bank of India indirectly banned crypto coins in 2018 and the crypto money investor was pleased with the rejection decision announced by the Supreme Court of India. This decision is thought to ensure the redevelopment of the crypto money sector in India, which has a dense population.

In the light of the developments, although the coronavirus created a retreat in crypto coins for a while due to the global economic recession, it proved that crypto coins were the first option used in cases of epidemic or uncertainty. In the coming period, it can be expected that the areas of use of both crypto coins and blockchain technology will spread to various areas. In fact, Microsoft recently announced that bitcoin codes will be included in the Arctic World Archive and that the data is aimed to be stored for more than 10 thousand years, demonstrating that it supports and values the field.

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