Not only did the Covid-19 pandemic throw a monkey wrench into the workings of the global economy, but all signs also point to the conclusion that the situation will not improve any time soon. This has added another layer of uncertainty among the investors, unsure where to put their money. To be honest, investment markets have never been a certain thing, but there were always oases of peace. They wouldn’t make you rich overnight, but at least you weren’t running a risk of going broke. Today, those opportunities, if they even exist, are few and far apart. One investment option that has been touted as such is cryptocurrency. Apparently, the current crisis will undermine fiat currencies, but digital ones will remain intact and even gain in value. Many experts have been expressing their belief in this theory. But, is it really that simple? Financial education has become more important than ever, but it’s still not enough. Staying up to date with the most important market news is a priority. Here are some news you should consider.
State of the Market
The Great Lockdown, as the Covid-19 recession has become known, has caused a lot of serious problems across the board. Of course, there were other factors that made things worse. The Brexit, followed closely by the US – China trade war, had a massive impact on the world’s economy even before we knew that the new coronavirus even existed. As the full force of the pandemic hit us, Russia and Saudi Arabia thought that it would be a great moment to have an oil price war, further destabilizing the already fragile global economy. It all culminated in March 2020. First came Black Monday, on March 9th. Dow fell 1,800 points, one of the worst losses in history. Then came Black Thursday, on March 12. Just as everyone thought that the week from hell is over, along came March 16th. Imaginatively named Black Monday II, the sequel was even more devastating than the original.
Are Cryptocurrencies the Only Game in Town?
Despite what you have been hearing, they are not. Many of them offer excellent investment opportunities at the moment, but they aren’t the only ones. At the time of crisis, people usually flock to gold as the only sure thing. Some experts suggest that digital currencies like bitcoin are the same and present a safe option to park your money. Not everyone agrees, though. Many investment funds CEOs say that there are still plenty of traditional opportunities available to investors. Tech giants like Apple, Google, and Microsoft don’t seem to be affected much by the global crisis. There are also a lot of companies, especially in manufacturing, that have been hit hard but are already making a comeback. Their stocks can be bought on the cheap, often at 50 cents on the dollar at the moment.
Big Companies Are Expressing Interest in Cryptocurrencies
PayPal is the latest company that has expressed interest in bitcoin trading. At this rate, it would be nearly impossible to find a tech or financial company that hasn’t started at least to dabble in digital currencies by the end of the year. This will mean several things for investors. First, the number of mathematical tools used to calculate the value of digital currencies like Litecoin will increase. This will make it easier to predict the market. Secondly, it will create some much-needed stability, as big corporations enter the game. It will eliminate a lot of uncertainty and push digital coins away from the label of a speculative market they currently have. Since stability is the number one concern at the moment, this could be a decisive factor in establishing crypto investments as a viable option.
Supreme Court of India Lifts Ban on Crypto Trading
In April, India’s Supreme Court overturned the ban on crypto trading. The ban was imposed by the Reserve Bank of India (RBI), the nation’s central banking institution, in 2018. Many hailed the move as “historic”, not only because it undermined the authority of RBI. It also allowed 1.2 billion Indians to enter the crypto trading market legally. This will have a massive effect on all financial markets around the world. This huge influx of fresh money and investors will dramatically change the landscape of crypto markets. It will also allow India to join the blockchain revolution, something many in the country has been asking for in the last two years since the ban was imposed.
Forex Is in A Slump
Both the USA – China trade war and Russia – Saudi Arabia oil prices war have done a number on the Forex market. At least until November and the United States Presidential elections, it will remain in a state of flux. While the dollar remains the world’s reserve currency and many central banks are buying it, the outcome of the tariff war with China is too unpredictable at the moment. Simply put, nobody knows what is going to happen and that is effectively stopping people from Forex trading. Many of them are transferring to the crypto market while waiting to see what will happen with Forex. Once forex is stabilized, it remains to be seen whether they will return or continue to do business through crypto.