The world is now fighting against a global pandemic which leads to the shutdown of the whole economic system. It made the society to a recession and the crypto field remained fairly untouched. China is one of the main cryptocurrency investing countries performing various crypto exchanges. But many businesses in China were frozen in this pandemic outbreak. So you will be in doubt, is it safe to invest in bitcoin during this pandemic. This comprehensive article will give you some information that clarifies your doubt.
Is It Safe To Invest In Bitcoin During A Pandemic?
COVID-19 outbreak has raised a big threat against public health and economic system. Bitcoin is the most popular cryptocurrency and is also known as the ‘king of cryptocurrency’. It is a digital asset launched in January 2009. Since the coronavirus outbreak, the relation between bitcoin and the equity market has increased. On the 12th of March, 2020 the price of Bitcoin fell below $4000.
This is due to the sudden flight to liquidity. Thus a lot of investors had margin calls in equity that had to be covered by liquidating other assets like bitcoin into cash. The price of bitcoin has now recovered back and it will probably be a while before Bitcoin prices soar up again. So is it possible that this rise in prices at this time when most other investment options look unprofitable is because bitcoin is becoming a safe haven? The main three things that make bitcoin appeals to be the safest investment option are:
- Lower transaction fee when compared to other traditional payment methods
- Bitcoin is handled by a decentralized authority
- All the transactions will be safe and secure
Is it still safe?
Is it still safe to invest in bitcoin? Researches and studies show that it is not safe to trade crypto in this pandemic. During this pandemic situation, as the economic status has been down, everyone protects their wealth and money. If so and you are enough brave to trade during this pandemic, then carefully read and follow the below-given tips.
- Trading cryptocurrency is not just like trading traditional fiat currencies. You have to carefully study the theories behind it before investing.
- Price if cryptocurrency is affected by many factors such as utility, supply, and demand, mining difficulty, market difficulty, etc. This is significant in this pandemic situation too.
- While selecting an exchange for trading, research about it. Analyze the minimum and maximum deposits for the platform, the total profit and loss trading, etc.
- As the majority of you are staying at home itself during this pandemic, stay safe at home and be engaged in the crypto market 24/7.
- Always start trading with a small amount and it is a good idea to trade risk-free.
The bitcoin halving occurred in May 2020, has a significant role in preventing inflation even though the price of bitcoin rises. But there is a high chance of losing your funds while trading in this pandemic. Be careful and follow the above-given tips while investing in bitcoin.