Hi Crypto Network,
The rise of coronavirus has led to a disruption in the marketplace. According to market data, the pandemic has made the stock market and assets in general to experience losses. This is mainly because operations are not normal making productivity to be low leading to losses.
If you look at the S&P index, you will notice that many companies are experiencing a downward trend. For traders, they are not looking forward to the next trading day especially if they have full access to market information. There are all kinds of stock quotes due to the situation.
Coronavirus has also influenced the situation with cash. Public health experts have warned against using banknotes as the virus can attach to the polymer notes, and thus spread through it. This has made China sterilize the infected notes to curb the spread of the virus.
Unlike other kinds of surfaces where the virus can survive for 48 hours, the virus can stay on the note for up to 17 days. With paper money transactions, users are advised to sanitize their hands after any transaction to avoid infection.
Are we looking at the end of cash? If so, when?
It is uncertain how long coronavirus will last. One thing or sure is that it will change the whole ball game when it comes to cash. It will lead to a cashless economy as people will be used for electronic payments. Once people are used to a certain system and it is convenient for them, they are more likely to stick to the trend. There is a high possibility, therefore, that when people start using electronic money the trend will stick.
People will also be more aware that banknotes carry a lot of pathogens and germs, which can lead to flu and other diseases.
Apart from the pandemic, there is increased use of electronic cash generally. It is convenient and cheap.
There are various measures that have been taken to deal with the pandemic. Currently, there is a coronavirus vaccine and coronavirus treatment that is being tried out. That means there is hope in dealing with the pandemic.
How will coronavirus impact on globalization?
Since the pandemic, there is so much change in globalization. Many businesses have now realized the risk of relying on the global supply chain. Due to fear, many governments have imposed travel bans to contain the disease. There are also additional visa requirements to discourage travel in and out of the country. Apart from travel bans, there are also export restrictions. For example, there is a travel ban from Europe to the US. No arrivals from Europe are allowed in the US. This was announced officially on March 11 by President Donald Trump.
The effects on globalization are not limited to where the virus is such as China, Italy, South Korea, Iran, etc. Many countries are taking protective measures by closing their borders.
Even though the disruption is most likely temporary, it will most likely have a lasting impact on globalization. It will reinforce trends that will undermine globalization. It will fragment the international supply chain, and reduce global business travels.
Most companies from other parts of the world rely on China for the global supply chain. China is at risk as the flow of business will change. Many businesses will look for alternatives. Already, President Trump imposed high tariffs on imports from China in 2019 and 2018. Looks like the trend will continue especially for western countries.
Why the Potential End of Cash Is About More Than Money
Cashless transactions are not something new, and they have not been brought about by coronavirus. The digital economy, in general, is experiencing fast growth. Even though it is a digital economy, there are still cash-dependent consumers. Reports say in Europe, up to 79% of all the point-of-sale transactions were in the form of cash in 2016. The percentage is probably lower now. Americans are the ones who are ahead in embracing cashless transactions and only a third of the entire population use cash in transactions.
Currently, people are more concerned about their privacy and identity. That is what brought about the rise of blockchain technology and cryptocurrencies.
More people are interested in decentralization. It can help to fight the black economy and deal with the issues that are faced due to centralization. Political influence, lack of transparency, cheaper transactions, more privacy, etc., is what people are championing for. With the traditional markets, you can experience the concept of data delayed leading to slow transactions. Decentralization helps to solve that.
Will COVID-19 Lead to A Gold Standard?
The world economy even before coronavirus was entering into recession and the pandemic has just made it worse. It has disrupted the global supply chain which has been a wakeup call for investors. Many complacent investors believe that bonds are safe assets. The pandemic has changed everything and debt issuance will be harder. When it comes to real estate which is also a safe haven for some, the mortgage rates are skyrocketing making the situation worse. It means that it may not be a long-term best investment alternative. Traditional assets have also been affected and that is why you will find a disparity in oil prices
Financial assets and fiat currencies will experience a fall that will shift the attention to gold and silver. Financial assets and currencies are tied together and thus if one falls, the other one falls too. Even though cryptocurrencies have been sought for a good alternative investment since they are decentralized, they have been caught up in the credit cycle and coronavirus, which has made their prices to drop.
Gold has been for a long time considered a safe haven asset. There are some investors who believe in government bonds, but bonds can only make money if people borrow from the government. With a recession, that will be a hard nut to crack. So far, the US treasury bonds give a ten-year profit of less than 1.6% but the future is not certain.
According to wall street, gold has been underpriced when we compare it to the dollar-based on supply. Gold was affected by the bear market in 1980 which made it not to be a very strong investment asset.
Gold is more likely to be a replacement for the failing fiat currency according to the financial times. The fall of fiat currencies and the Keynesian mythology will be a strong asset to the growth of gold.
The World Awaits Digital Currency Breakthrough
Most of the world and not only millennials are looking up for a breakthrough in digital currency. With the current generation that is more into privacy and protection of personal identity, digital currency is a good alternative. It is based on the blockchain which makes it decentralized and transparent. It is also safe from political issues and economic variants. Even though at such a time it is experiencing losses, economists believe it will rise and it has to go through that phase to be complacent.
According to a research paper done by the Peoples Bank of China (PBOC) in 2016, digital money and cash will run parallel for sometime before digital money replaces cash. According to the paper, digital money will have lower transaction costs comparatively and that will make people prefer it. There is a high likelihood the situation will turn out that way after some time.
That may be the reason why some governments are working on their own digital currency. The PBOC, for example, is working on its own currency. In the future, more governments will follow that trend. It will also be hard for state-issued cryptocurrencies to compete with private companies.
The rise of popular private companies such as Facebook developing their own digital currency also has a big influence on the change of trend. It has increased public interest making more people interested in it.
The trend for digital currencies is changing, from being a speculative investment to being a daily spending currency. There is an increasing number of stores that currently accept digital currencies especially the mainstream ones such as Bitcoin.
Even though digital assets have been affected, the blockchain has not. Currently, many exchange platforms are switching to embrace the technology to make their platforms decentralized. It will help them have full access to real-time data that will help them in their operations. In the traditional market, where the transaction delayed at least 15 minutes, the losses that will be experienced are immense. There are also many blockchain platforms that are being developed especially in China, and most of them have tokens as support. That means that digital assets are here to stay.
Solution for The Transition Period – TPX GOLD
AS we undergo the pandemic, TPX gold may be a good alternative. The platform is based on the blockchain technology which is decentralized for your assets to be safe. To invest, you have to buy TPX tokens which 1 token is an equivalent of 1 gram of gold. What makes the platform better is that it deals with gold which is a safe haven asset, and it is decentralized. What makes the platform unique is that even though TPX token and gold have the same value, they are all different meaning that the token price and the price of gold can rise and fall independently. When the pandemic makes the price of gold to fall, it does not mean that the token price will also fall. The tokens are tradable, transferrable, traceable and secure. You also have the ability to sell your tokens whenever you want to.
Hopefully, you have enjoyed today’s article. Thanks for reading!
Have a fantastic day!
Live from the Platinum Crypto Trading Floor.
Earnings Disclaimer: The information you’ll find in this article is for educational purpose only. We make no promise or guarantee of income or earnings. You have to do some work, use your best judgement and perform due diligence before using the information in this article. Your success is still up to you. Nothing in this article is intended to be professional, legal, financial and/or accounting advice. Always seek competent advice from professionals in these matters. If you break the city or other local laws, we will not be held liable for any damages you incur.