FX.co ★ What may happen to bitcoin when COVID-19 pandemic ends?

Bitcoin has shown a great rise this year. Since January, BTC has grown by more than 150% amid the coronavirus pandemic. However, everything is coming to an end, and COVID-19 will probably be defeated in 2021. However, medical experts warn that the virus will not go away in a moment. The epidemic will decline only when the majority of the population gets sick or, thanks to vaccines, sufficient collective immunity is formed.

Nobody knows what will happen in the cryptocurrency market after the end of the pandemic. During the crisis, many national currencies weakened, and bitcoin strengthened in the status of a defensive asset. It is likely that after the end of the crisis, investors will start selling bitcoin. However, BTC is a risky asset, the demand for which may increase along with the economic stabilization.

Analysts believe that the end of the pandemic could have a positive impact on the crypto market. Perhaps cryptocurrencies will increase their value as a defensive asset in terms of a hedge against currency risk. Defeating the coronavirus means an economic recovery and an increase in inflationary risks. Citibank recently announced a 20% devaluation of the US dollar, and towards the end of the pandemic, such sentiments will only intensify.

Analysts also suggest that the recovery of the labor market will have a positive effect on cryptocurrencies, as people will have more free money to invest.

Also, during the pandemic, large companies invested in cryptocurrency. Therefore, as the global economy recovers, they can increase their share of risky assets. In other words, this will have a positive effect on the cryptocurrency rate.

However, there are some analysts who do not think so. Bitcoin has significantly increased in value since the beginning of the pandemic, that is why its end can bring down the cryptocurrency rate. Perhaps the funds invested in bitcoin will be transferred to other currencies or to the stock markets.

However, a decline in the cryptocurrency market could provide an opportunity for a wider range of investors to purchase digital coins at favorable prices. This will again lead to increased investment in digital currencies. In other words, there will be no protracted decline in the cryptocurrency market after the end of the pandemic.

Meanwhile, on Tuesday, December 1, bitcoin is trading at $19,712.80

Ether rose by 3.46% to $505.36. XRP grew by 3.2% to settle at $0.65 as well.

The dynamic of cryptocurrencies is positive, it is possible that there will soon be a new spurt, as analysts believe.