Will Society Shift From Cash to Cryptocurrency Due to COVID-19?

03/07/20

If the continuing spread of Coronavirus throughout the world is causing you to worry about your investments, you’re not alone. News of the virus triggered a global shortage of gold bars as money flowed towards safe havens, taking the price of gold to a seven-year high. And yet, while gold is the safe asset of the past, it may be a poor choice for the future.   

The risk of infection from cash is a significant threat

A key recommendation from the World Health Organization (WHO) is to encourage the use of contactless payments. Moreover, it’s best to remain at least one meter away from other people while in public. Gone are the days when business was done by handing little bits of metal to one another.

When it comes it COVID-19, everything we touch could potentially infect us. Cash payments tend to require getting close enough to be able to touch the other person, increasing the chances of an individual passing on COVID-19. There is also a real risk of the virus being on the coins or notes themselves, spreading to the recipient of the payment.

Contactless cryptocurrency-based payments are the future

Bitcoin has long been seen as a safe place to store value, but with more merchants now accepting it as legal tender, it is now beginning to replace cash itself. Blockchain technology is now so easy to use that contactless Bitcoin payments may be about to explode in popularity, with other cryptocurrencies set to follow.

The need to extend the use of contactless payments is obvious, and crypto is in prime position to take advantage of this fact. The majority of businesses are already shifting their payment services to be able to offer contactless payments, which could ultimately lead to crypto being used instead of cash.  

As payment options continue to evolve and wearables become a more mainstream part of everyday contactless payments, with that evolution it is only a matter of time before cryptocurrency enters the mainstream as a payment option.

It is hard to avoid the conclusion that the impact on the value of cryptocurrencies will be positive - perhaps in the extreme.

Coronavirus might be the end of cash

A cashless society is becoming more likely by the day. There are compelling reasons for this aside from the dangers of Coronavirus, no one wants to have their pocket full of pennies, but the immediate threat has sped up the inevitable. 

Signs in shop windows now routinely inform customers that only contactless payments are accepted. The bank of China is disinfecting money and holding it for two weeks before allowing it back into the system. People seem to have a genuine fear of handling cash - and it’s hard to blame them.

Cryptocurrencies are being reconsidered by the establishment due to COVID-19

Democrats in US Congress recently proposed the creation of a digital dollar to send out aid payments in early versions of its coronavirus relief package, thus signaling they are serious about establishing the infrastructure for a central bank digital currency. And the latest news from across the pond is that the Italian banking Association (ABI) has also set guidelines for the launch of a digital Euro, following their appointment of a working group last year to study and research digital and crypto-assets.

All of this will likely herald a long-term boost for cryptocurrencies, as the broader usage of digital currencies by the world's governments establishes trust in blockchain technology and cryptocurrencies. 

Throughout its history, Bitcoin has fluctuated widely in value. Whenever it faced a downturn, it has recovered and returned even stronger. It was by far the best performing investment that you could’ve made in the last decade, and it made 2020 a very promising year to date for investors who were wise enough to have trusted it.

High hopes for the value of Bitcoin 

Looking forward, Bloomberg forecasts strong growth for Bitcoin this year due to the chaos created by the coronavirus outbreak and the mass printing of money by the world's governments to try and prop up their economies. According to Bloomberg's prediction, "Bitcoin will approach the record high of about $20,000 this year". If their prediction is anywhere near accurate, now would be the perfect time to consider investing.

With worldwide panic taking up much of our focus, it’s easy to forget that Bitcoin is already up by around 30% this year alone and has breached the $10,000 level twice this year already. Other cryptocurrencies present similar opportunities. Bitcoin is, as usual, at the forefront of the news, and many respected analysts expect 2020 to be a breakout year.

Despite the state of the world at present, all of the indications are positive for cryptocurrencies, perhaps more so than ever before. 

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