When COVID-19 erupted in 2020 and spread like wildfire worldwide, it caused untold suffering in increased mortalities and morbidity. However, it also brought the world to realize the importance of cryptocurrency in the economy. Many governments imposed lockdowns and restricted movement. At the same time, it dawned on governments, businesses, and individuals that cryptocurrencies like Bitcoin are a welcome relief. A cryptocurrency wallet is an excellent way to safeguard your funds. Anyone can invest in cryptocurrencies thanks to the best trading site, https://biti-codes.io/.
Bitcoin has become so popular and experienced a boom in adoption and use. Many businesses embraced Bitcoin as a payment alternative, and many consumers followed suit. The effect was a significant Bitcoin boom that led to the leading cryptocurrency becoming a household name.
The value of Bitcoin also shot up significantly, reaching an all-time high of over $68,000 towards the end of November 2021. And while the price has dropped dramatically since then, it is clear that there was a Bitcoin boom like no other. Today, Bitcoin is more valuable than different asset categories and world currencies.What caused this unexpected and dramatic rise of Bitcoin? Here are the most likely causes.
The COVID-19 pandemic significantly triggered the Bitcoin boom. When the pandemic emerged, governments rushed to impose lockdowns and other restrictions to prevent the spread. Unfortunately, this affected everyday lifestyles where businesses were closed, and people could not go shopping like they used to.
And this led to a surge in e-commerce, and Bitcoin became one of the most favorable payment alternatives. Many e-commerce platforms and businesses introduced Bitcoin payment, which led to a rise in Bitcoin use. Using Bitcoin to pay virtually has inspired more companies and people to embrace Bitcoin.
Moreover, Bitcoin’s value also surged meteorically during the pandemic. For example, while Bitcoin’s price was about $7,000 in January 2020, the price surged to about $17,000 by November of the same year. One factor that led to this significant surge in Bitcoin’s price is increased investment in Bitcoin, especially from those who lost their jobs and realized that Bitcoin provides an alternative way of making money.
Governments printed and released more money into the economy as a way of helping people and businesses to cope with business disruptions and other restrictions. And this led to increased inflation, with many local currencies losing value. Bitcoin and other cryptocurrencies became a haven as people could use them to hedge against inflation.
Many institutional investors, including publicly traded companies, converted their cash into Bitcoin. And this boosted confidence in Bitcoin as a credible store of value and investment asset. Institutional investment has since increased, inspiring confidence in Bitcoin, hence the recent boost.
While many governments were initially reluctant to accept Bitcoin, its growing popularity has led to a change of perspective. It increasingly became clear that ignoring or even trying to fight Bitcoin was futile. Hence, major economies like Japan became leaders in accepting cryptocurrencies like Bitcoin.
A leading global economy such as Japan accepting Bitcoin sent strong signals to other governments and non-governmental entities. They, too, stopped ignoring Bitcoin and embraced it more. The outcome has been the recent surge with governments of El Salvador and the Central African Republic adopting Bitcoin as legal tender.
Various interrelated factors caused the recent Bitcoin boom. The COVID-19 pandemic must have played a significant role, although it triggered other factors to come into play.