Covid-19 has brought cryptocurrencies into the mainstream in 2020, which many experts believe will lead to an uptake from governments across the globe.
The pandemic has led to a vast global reduction in the use of liquid money, which has naturally led to a larger uptake of digital payment methods, and, therefore, cryptocurrencies. This has led to almost all major cryptocurrencies growing enormously in value across the whole of 2020 – in spite of the sharp fall we reported this week. Additionally, people lost faith in traditional financial institutions and the value of government-backed FIAT currencies, leading people to turn to alternatives.
First and foremost, a report from TheWeek Magazine has suggested that the government might look at cryptocurrencies as an easier way of distributing aid going forward. This has already been put into practice by the Indian government, who used cryptocurrencies to aid its citizens with daily expenses. Due to the Covid-19 pandemic causing a massive reduction in human contact, the Indian Government distributed aid online in the form of virtual currencies, allowing people to subsequently pay their bills online and order what they need.
As the use of cryptocurrencies has grown globally, with some governments becoming more accepting and even using them, more regulations have been put in place across the world. Regulatory methods regarding cryptocurrencies have been strengthened by governments globally, with some countries even opting to accept tax payments in bitcoin.
The main problem with investing in crypto has always been its volatility due to its decentralized form. However, some experts believe that a widespread acceptance of bitcoin and other virtual currencies could lead to its value skyrocketing over the next decade. However, others have warned against such claims.