How has the COVID – 19 Pandemic Affected Cryptocurrency?
Over the past two years, many papers analyzed how the outbreak of COVID – 19 has affected alternative currencies, like cryptocurrencies. A year into the pandemic, a once seemingly unreliable form of currency, became an overnight gold mine. For instance, after the pandemic bitcoin – the first cryptocurrency made – was worth $7,300. Today, most cryptocurrencies like bitcoin are worth more than $46,800 – a staggering 640% increase from pre-pandemic. However, this upward fashion is not always obvious from a theoretical standpoint, as numerous events could cause the currency to crash in response to a crisis. (Jabotinsky, Sarel, 2021).
Buyers fear that a disaster will lead banks, economists, and politicians to interfere in the marketplace, which will switch their investments into a decentralized crypto market. Different forces may also push down calls. Cryptocurrencies may come to be closely correlated with traditional monetary markets in times of crisis so the gain of switching to crypto is negligible. The start of march, however, changed into a disastrous event for the global market as news of the COVID-19 pandemic unfolded, the inventory market had witnessed the quickest crack since 1929. Certain sectors, such as the hospitality and tourism sectors, have also seen a steep decline in their businesses as countries carried out lockdowns and travel regulations. (THE IMPACT of CORONAVIRUS on CRYPTOCURRENCY and ITS FUTURE, n.d.)
All the panic created from the uncertainty of the fate of the crypto and stock markets have led people to liquidate their assets early in the pandemic before the financial crisis had even started. Traders quickly converted their holdings into coins to safeguard their budget. However, the cryptocurrency market had collapsed under the anxiety of its investors selling or liquidating their assets. Cryptocurrency markets are complicated systems based totally on a hypothesis. When buyers interact with the usage of techniques that generate a few biases accountable for endogenous instabilities. This paper investigated the herding biases by quantifying the self-similarity intensity of cryptocurrency returns during COVID-19 pandemic.
The Impact of the virus on markets and, ultimately, on the global boom relies on the durations and spread of the outbreak as well as policy makers responses and other worldwide corporations such as WHO organization. This raises concerns about systemic threats, due to the crypto market ties with the traditional market through crises. These issues are only amplified now because the crypto market maintains positive momentum in its growth. As a substitute, if the impact may be attributed to pump – and – sell – off techniques or criminal activity, regulations appear to be needed. (Jarboui, Mnif, Mouakhar, 2020)
For this reason, the pinnacle of cryptocurrency dynamics and the herding bias existence we reanalyzed earlier than and after COVID-19 unfolded. Through this study, we will try to decide the impact of COVID-19 on cryptocurrency. Moreover, the effects of graphs built by techniques are exceptional in topological and statistical residences and the community’s conduct. Specifically, for the duration of the pandemic, it may be seen that Ethereum and Otum are the most influential cryptocurrencies in each technique. These effects provide insight and exceptions for buyers in phases of sharing records about cryptocurrencies amid the uncertainties posed by the pandemic. (Mnif et al., 2020)
Reference
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more
Recent Comments