In the pandemic’s early days, cryptocurrency exchanges experienced noticeable difficulty in weathering the economic impacts of the crisis. Bitcoin prices plunged 50% on a single day in March 2020.
However, since then, the cryptocurrency mood has brightened, and exchanges are enjoying increased activity in trading volumes, employment, and crypto-trends. To benefit from this change in cryptocurrency fortunes, look for exchanges that have a proven track record.
There are many different exchanges available to try or utilise such as Binance. You can click here for a full review of Binance to get started or research the other options online. Either way, it can be beneficial to look into cryptocurrency during this time of crisis.
Here is a roundup of cryptocurrency exchange performance during the COVID-19 pandemic.
While COVID-19 has forced many companies to lay off their employees in large numbers, cryptocurrency employment has flourished. Kraken, a San Francisco based exchange, recently filled 67 job vacancies in the wake of increased customer demand. Kraken was conducting its operations remotely and enjoyed good distribution since before the pandemic, making it well-placed to acclimatise to the shifting job climate. San Francisco’s Coinbase also opened its doors to dozens of employees across its franchises in Asia, Europe, and the U.S since the start of the year.
Furthermore, within a month of coronavirus’s first case, cryptocurrency jobs were posted on the popular job site Indeed.com at a record-breaking rate of 114.5 per million. This number further jumped by 3% in February to 118.4 per million, according to Forbes.
The Bitcoing halving event, dubbed as the Black Thursday, saw 9 times the daily average amount of Bitcoin being sold back to cryptocurrency exchanges. Coinbase alone recorded $1.3 billion worth of cryptocurrencies inflows to the company’s digital wallets. Chainalysis, a leading crypto-research center, corroborated this trend deeming it to be the largest ever Bitcoin influx in cryptocurrency exchange history.
Since then, volumes have normalized. Exchange trading activity has decreased, which has stabilized prices. This recovery has catapulted bitcoin prices from $4,000 to $9,914.24, and set cryptocurrency exchange demand on an upward trajectory.
One trend that has gained traction in the crypto exchange world is dollarization.
Despite coronavirus’s perilous effects on worldwide currency, USD’s popularity has surged. It’s the one currency which controls the lion’s share of the world’s assets, debt denominations, and cross-border transactions, making it the most accessible and liquid currency in the world. These are also the reasons why it is considered the safest investment in times of uncertainty.
Rightly, crypto companies have registered an increase in stablecoins popularity because of their ability to provide USD equivalent exposure. These possess cash attributes and allow peer-to-peer transactions without a middleman, completely on the basis of change in possession. But, they also have the capability to function as conduits for safe and secure global financial transactions, without any of the banking system’s security risks.
The pace of cryptocurrency trading has increased globally. In some countries, crypto-exchanges are enjoying an uptick in trading activity. Russian exchanges recorded a 5.56% surge in the last days of March, compared to February numbers. One of the factors that led to this increase was Russia’s first paid week from March 28 to April 5 of this year for at-home workers to contain the outbreak.
The situation in developing countries is also looking up. Data from a reputable peer-to-peer trading platform LocalBitcoins showed bitcoin trading volume hit several peaks in countries like Venezuela and Morocco. Chile, specifically, reached a new milestone of 330 million Chilean pesos worth of bitcoin trading volume in the first week of April. In Argentina, Bitcoin purchases climbed 1,028% in the last two years. 722 billion Venezuelan bolivars traded in Bitcoin and fiat currencies also clenched a new record for the Venezuelan cryptocurrency market in the last week of April.
Beyond Latin America, Bitcoin exchanges have also registered groundbreaking activity, with Moroccan exchanges shattering previous volume records in April’s first few days.
All these developing countries share a common element – troubled economies. Venezuela has its hands dipped in economic and political challenges, and Argentina is scrambling to pay $65 billion in foreign debt while dealing with COVID-19’s aftershocks.
Bitcoin has provided a safe alternative, and cryptocurrency exchanges have benefited as a result. Despite its uncertain shifts, its value is never going to reach the 10 million% inflation rate that agitated the Venezuelan public last year.
The Verdict
Cryptocurrency exchanges have weathered the Coronavirus pandemic in grand fashion. Not only have they recovered from their losses in mid-March of this year, but they are also making significant strides to make cryptocurrency the cornerstone of the post-COVID-19 financial system. No wonder, Bitcoin sentiment has climbed new heights with Twitter’s daily Bitcoin tweet bandwidth increasing by 16.5%, according to the analytics and finance management startup, The Tie. Are you also going to trade through a cryptocurrency exchange?
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