When the United States faced the financial crisis of 2008, many people lost trust in financial institutions. Many people lost their investments and their homes. This is the time when the Bitcoin was birthed.

What is the Bitcoin?

The Bitcoin is a form of cryptocurrency. This means that it is a digital asset that is separate from the bank, and used as a medium of exchange. The advantage of this currency is that it is completely separate from the banks, giving people freedom. Around the time of the financial crisis, this was incredibly important as trust in financial institutions had been lost. Another advantage is that the transaction costs are much lower than when using banks, and you can send money across boards at a lower cost and faster time.

However, cryptocurrency is extremely volatile as its value cannot be influenced or controlled by a central bank, instead, it follows the forces of demand and supply. This means that the more people who use it and demand it the more the value goes up.
In February 2020 the Bitcoin rose to about $10,000, as locals in China lost trust in the Chinese government as the coronavirus grew.

COVID-19

Covid-19 has affected many people’s jobs, claimed the lives of many and affected the financial markets. This virus has raised the fears of the United States will facing a recession sooner than supposedly expected. The Senate has been back and forth working on a bill to help people who have lost their jobs and shelter, and to prevent the United States from entering a recession. Now, this Bill mentions that the Federal Reserve Bank is thinking of introducing a digital currency. This will be separate from cryptocurrencies and will operate like loans from the Federal Reserve Bank. Since cryptocurrency took off in the 2008’s, it only seemed like a matter of time until the Federal Reserve Bank introduced digital currencies, and now COVID-19 may be the catalyst that was needed.

Digital currency may be safer for everyone and may aid with social distancing practices.