This year hasn’t been easy for a lot of people. Some really bad stuff has happened so far, but probably the worst for everyone has been the COVID-19 disease, declared as a pandemic by World Health Organization (WHO) since March; and its awful consequences all around the world.
With +37.7M global cases, +1M fatalities, and entire countries and borders locked in strict quarantine, the economic damages were just about to explode since the beginning. Stock markets descending, unemployment rates skyrocketing, countries on the brink of recession, and even the main oil index plummeting beyond zero this year… well, we’ve had better moments, undoubtedly.
However, in the middle of this whole disaster, there’s some good news: the total cryptocurrency market capitalization not only survived to the generalized blood bath into the markets but has managed to grow +157% since the pandemic started in March, according to CoinMarketCap data. At that time, the market cap was +141.1B; while, to date, has increased to +363B.
Bitcoin (BTC), the first cryptocurrency, has followed that bullish trending, especially this month. Since the pandemic started, this coin price has grown +51%, from 7.600 USD to around 11.500 USD. This isn’t the highest price of the year but is very close and with some good predictions about it.
Additionally, according to a recent study by the University of Cambridge, there are at least “101 million unique cryptoasset users across 191 million accounts opened at service providers in Q3 2020” worldwide. Compared to the user base presented by the same report in 2018, this is a significant 189% increase.
Meanwhile, the American Dollar (USD) hasn’t been performing that well facing the COVID-19. If we check the U.S. Dollar Index (USDX, DXY, DX — a measure of the value of the USD relative to a basket of foreign currencies), we’ll note that the value has decreased at least 9.3% since March.
The fact is this: Bitcoin and cryptocurrencies are exploding while USD, slowly but surely, it’s decaying.
Why is this happening?
Well, we can say the pandemic doesn’t help and the USD history per se isn’t so good. Indeed, it’s calculated that, since 1971, this currency has lost 98% of its value compared to gold. Besides, the U.S. Federal Reserve has been very dedicated to print more and more millions lately, which isn’t a good thing; like the Seeking Alpha’s experts pointed out:
“All of the stimulus is going to cause massive inflation down the road. As the Fed prints more money, each dollar is worth less. Inflation has to occur, so assets that are based on the dollar will inflate, but will really be worth less. Gold is now an alternative currency, which has real value and is not just a piece of paper”.
We can say Bitcoin and its pairs are also nice alternatives: fast, portable, and available in the entire world. That’s probably why so many people have decided to enter this year in the cryptocurrency world, basically searching for a good haven for their funds.
Besides, considering the huge explosion in DeFi apps and Yield Farming this year (with +11B invested so far), isn’t weird at all that the total cryptocurrency market capitalization has skyrocketed this 2020.
Featured Image by Nattanan Kanchanaprat / Pixabay
Originally published at https://blog.alfa.cash on October 13, 2020.