Why Cryptocurrencies Could Be Interesting In The Post-Coronavirus World

by HowToFind .com 5 months ago in alt coins

In the financial environment there are new questions opening up for the future and one of them is what role cryptocurrencies can play in the years to come.

Why Cryptocurrencies Could Be Interesting In The Post-Coronavirus World
Photo by Bermix Studio on Unsplash

The coronavirus crisis has opened up new questions for the future, one of which is what role cryptocurrencies can play in the years to come.

Many voices stress the potential they may have either as an active refuge with which to protect themselves from market volatility, or as a payment system with a view to consolidation.

In any case, the scenario opened up by COVID-19 seems quite propitious for these digital assets.

As a starting point, one of the aspects that has most marked these months of quarantine has been social. In a new stage in which distancing is the norm, cryptocurrencies may play a more important role than they did previously.

According to Luis Vaello, director of operations in Spain for Binance, the first thing we need to understand is the evolution that money will suffer: "The days are numbered" and we are moving towards a "cashless society".

Will the coronavirus crisis put an end to cash?

In Vaello's opinion, for the state the use of cash is "an inconvenience that feeds the underground economy", while for the citizen in these times it is "a source of bacteria and viruses".

Hence, cryptocurrencies not only offer an option that avoids contact between people, but also "assures the holder that he is the sole owner of his money.

Many experts have already warned of a post-COVID-19 crisis worse than 2008 and how hard the recovery will be.

With this data, we can expect that "we will be affected by a very probable inflation" and even "potential blockages of our savings", says Vaello.

That is why cryptocurrencies "offer an escape route to preserve the value of our savings," he adds.

The Digital Assets Institute (DASI) is exploring the potential of this segment in the wake of the health crisis. As they explain, the sector continues to "experience gradual growth" despite the exceptional situation marked by the crisis.

In recent months we have seen that the decentralized economy "is attracting more attention for investors.

Main Strengths For The Investor

Given this optimistic outlook for digital currencies, it is worth considering what their main strengths may be and what benefits they generate, in turn, from the point of view of investment.

Regarding the first, the most remarkable thing is that it has features that allow its holders to be "the only owners of the value they treasure", unlike when we have money in a bank or a third party platform that, although officially our capital, at any time "could block our access", highlights Vaello.

When we propose this scenario, it is normal to think about gold, an asset used as a refuge, but which has a great disadvantage, its portability.

If we had our savings in gold and wanted to send it to another location, however close it might be, "it would be a complex, slow and expensive operation," exemplifies the director of operations in Spain for Binance.

On the contrary, the same process with bitcoin would only require "a mobile device or PC from which to order the transfer and in one second it would be completed," he adds as an illustration of one of the main advantages.

Thus, for the citizens of some countries, crypto currencies like bitcoin are already a refuge today.

We can find examples in Argentina or Venezuela where the inflation of their local currency pushes many of their citizens to resort to this class of digital assets.

Also, in the United States and Europe, with the issuance of currency by central banks many people are buying cryptocurrencies to prepare for possible hyperinflation.

According to the DASI, cryptocurrencies "have been considered as a refuge value and their transaction volume has increased". A trend that should be growing in the coming years.

Disadvantages Of This Type Of Asset

On the other hand, in terms of points against which cryptocurrencies could present today, they highlight "their complexity and their low level of adoption at a global level", compared to other more established systems, says Vaello.

Many people don't dare take the plunge and buy cryptocurrencies because they find the new concept too complex.

But it really shouldn't be an impediment. Just as you don't need to have knowledge of the technical aspects to use the Internet, you don't have to "understand the Blockchain technology in detail to own and use crypto coins," says the expert.

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