When the Covid-19 pandemic hit the globe at the beginning of 2020, many sectors were adversely affected. For instance, the hospitality and airline industries took a dip due to travel restrictions and lockdowns. Bitcoin was also hit in March 2020 by the financial impact of Covid-19. However, the effect was not long-lasting.
While gold has been vaunted as the go-to store of value, bitcoin emerged as a serious challenger. The bitcoin price proliferated in the Covid-19 period. The price increased from $5,000 in March 2020 to an all-time high of over $63,000 in April 2021.
Bitcoin is constantly making headlines with new highs every month and driving other assets with it. So what has caused this massive increase in price in the middle of the pandemic, you ask? Well, Covid-19 has proven to be a blessing in disguise for bitcoin. Here is how it has boosted the massive bitcoin price increase.
Shift Toward Digitalization
To curb Covid-19 effects, many states resorted to instituting lockdowns and curfews. Although this move has various negative effects, it has caused a shift toward the digital world. While remote working was a trend in pre-Covid times, the pandemic accelerated the use of digital technology. Even ordering groceries for delivery is now the norm.
As people gravitate toward the digital world, the adoption of remote financial services has also increased. In turn, this has boosted bitcoin adoption. All you need is a good internet connection to buy and sell bitcoin, making it a perfect option for international transactions.
Hedge On Inflation
The effects of Covid-19 have forced the government to provide stimulus packages to keep the economy afloat during the pandemic. In addition, central banks have resorted to printing more money, causing inflation and affecting people’s buying power. According to Forbes, the U.S. Federal Reserve is “tolerating” inflation running above its 2% targets, signaling a tolerance for more price increases.
Bitcoin is, therefore,…