Correlation Between COVID-19 Coronavirus and Bitcoin Price
In March, 2020 when COVID-19 was rampant and shut the world down, bitcoin value dropped at the same time the stock market dropped. Bitcoin owners should monitor the stock market, specifically the S&P 500, for insight onto how bitcoin will react to what is going on in the world.
COVID-19 was scary. It still is scary, but now we are little smarter as to the effects of the disease and how to prevent it. As we become more educated, the world is opening back up and people are making investments again.
A bitcoin casino means you can spend bitcoin at a casino, which is another reason why you should monitor the value of bitcoin. Like stocks, you do not want to sell or spend bitcoin when the value is low, but you should sell when the value is high, in order to get the most for your money.
Crypto wallets can be used for carrying out purchases online, so you will want to make sure you have the right about of bitcoin before attempting to make a purchase. As the world continues to recover from COVID-19, you should continue to see the value of bitcoin increase. With a vaccine on the horizon for COVID-19, the value of investments should skyrocket after the vaccine is announced. Now could be the last time to buy low on assets like bitcoin and stocks.
Bitcoin in relation to the Stock Market
From the stock markets to bitcoin prices, the entire world has seen its financial markets affected by the global pandemic. Bitcoin has been affected much the same as stock markets, and it dropped in value at the same time stocks did in March, 2020.
Research indicates there is a relation between what the S&P 500 does (more than the NASDAQ, DOW, or any other financial measurement) and what the value of bitcoin is. If one drops, so does the other. If one increases, so does the other. So, owners of bitcoin should also watch the S&P 500 for an eye on how to predict what will happen with bitcoin.
Bitcoin Investment Prices
Bitcoin is still a worthwhile investment, and as we approach 2021, we know there are numerous factors that will affect the price of bitcoin in the next year. Currencies like bitcoin can be harder than value that stocks, which scares away some investors.
The prices of bitcoin can be affected by a couple of components that you should consider:
- Demand – if nobody wants it, it will not be worth much. This is really true for anything in the world, but it is hard to convince someone that a dollar bill is worth more or less than a dollar, whereas the value of bitcoin changes directly based on the demand.
- Risk tolerance – bitcoin can be risky, so it takes a certain type of investor to be willing to take the risk on bitcoin. A lot of people are taking on less risk until the new normal in the world is established after the release of a COVID-19 vaccine.
After COVID-19 spread worldwide, there was less demand for bitcoin because people were losing their jobs and had less money to spend. Even people that kept their jobs generally lowered their risk tolerance, as nobody was sure how the world would be changed by the pandemic. Almost every industry in the world was directly or indirectly affected by COVID-19. Now that things are leveling off, people are getting jobs back, and risk is going back up, bitcoin price will continue to increase.
Bitcoin as a currency
Bitcoin is getting bigger and bigger every day. It is traded more than the British pound, so it is certainly not a small investment any more. The popularity of bitcoin stems from its ability to be used as a crypto currency, and it can be spent in ways that regular money cannot.
While volatile, bitcoin has also proved to be a worthwhile investment for many. Do not make the mistake that many people make when the stock market crashes. When the value is down, that is the time to double down and put more money in. Do not sell everything when the value is down, you will lose all your money.
There are other crypto currencies that bitcoin competes with, but bitcoin is clearly the cream of the crop.
The overall Economy before Covid-19
While bitcoin is its own entity, it is still necessary to keep an eye on the world’s economy. Predictions are that the economy will continue to improve as more businesses are able to open after the global pandemic and people get their jobs back. As the economy recovers, the value of bitcoin will continue to surge. This could be a good time to invest in bitcoin, as prices are likely to go up over the course of the next year or two.
A vaccine for COVID-19 should be released sometime within the next 6-12 months. Before the vaccine is released is the opportunity to buy investments like bitcoin and stocks. Once the vaccine is released, the economy will flourish again and everything will become expensive again, making that a good time to sell and cash out your profits, but not a good time to buy.
After the Covid-19 Pandemic
COVID-19 drastically affected every industry in the world. Even if it was just for companies to wait out the catastrophic events, companies at least paused, if not shut down. The pandemic appears to now be winding down, and a vaccine is hopefully on the horizon.
Once the vaccine is available throughout the world, we can get a better idea for what exactly the new normal will be. That said, as the stock market has made a full recovery from the crash after the pandemic, it will continue to rise. So, too will bitcoin. If you were on board with investing in bitcoin before the pandemic, there is no reason you should stop investing now that the world is nearing recovery from COVID-19.