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As we witness the 1 year anniversary of Covid-19 and the non-stop need to wear a face mask, we are at the cusp of history as Google search activity suggests more people are interested in Bitcoin than the virus. Although, this is expected. As science makes strides at finding a solution to the virus, people are looking toward the future of money.
Throughout 2020, only a few investments gave as many returns as Bitcoin. Alongside the pandemic, Bitcoin showed incredible resilience. In the first three quarters of the year, the price ranged from $4,000 to $10,000. But as soon as the price broke this range, we saw the cost of one BTC more than triple.
In March 2021, Google Trends, a Google tool to gauge general interest in trending topics, returned a value of 45 for “Bitcoin” compared to 21 for “COVID-19.”
All of this begs the question: Why are people more interested in a digital currency than a global pandemic?
Flashback: When the world heard about COVID-19 early in 2020, it was time to close doors and go home. The closure of non-essential businesses immediately caused an unprecedented rise in unemployment. Within the last week of March and early April 2020 nearly 17 million people filed for unemployment. At the time, the unemployment rate was above 15%. A number well above the height of that seen in the Great Recession.
As this went on, Bitcoin struggled. The benchmark cryptocurrency couldn’t break out of the $4,000 to $10,000 range for almost 9 months. However, as the economic crisis created by the coronavirus loomed, interest in digital currencies soared.
By November 2020, Bitcoin surged 40% to register its biggest monthly gain since May of 2019. Interestingly, there were virtually no traditional assets or investments that could chart a 40% rally in a single month. Realizing this, the frenzy began.
Several publicly listed companies like MicroStrategy, Square, Cyberpunk Holdings began to buy Bitcoin in the wake of the pandemic. PayPal also started offering cryptocurrency services for its customers. Many retail investors who were also looking at where to put their money began investing in the asset. By the close of the year, a single Bitcoin returned a Christmas gift of $28,891.
Clem Chambers, founder and CEO of financial markets website ADVFN.com, said at the time:
“The differences between 2020’s run toward $20,000 and 2017’s is that this current one is against a backdrop of greater geopolitical chaos, increased adoption but less general audience interest and less new coin supply.”
In December of last year, CoinDesk reported that Google Trends returned a value of 21 for the worldwide search query “Bitcoin Price.” This was over double the value of 10 observed in November 2020.
As of writing, the worldwide number of coronavirus deaths was 2.63 million. In the space of a year, over 119 million cases had been recorded. However, the United States remains the most affected with 530,000 deaths attributed to COVID-19, and 29.3 million cases recorded in total. This was coupled with the dollar losing 69% of its value last year—when compared to BTC.
As the cases grew, unemployment fell. By February 2021, unemployment was at 6.2%. The global chaos caused by the pandemic was also fading gradually in people’s awareness. In August 2020, Google Trends returned a search value of 100 and 17 for “Covid-19” and “Bitcoin” respectively. As the Bitcoin bull run continued into the new year, January Google Trends results showed a value of 80 for “Bitcoin” and 20 for “Covid-19.”
America’s economic policies contributed to the bullishness of Bitcoin. The newly signed $1.9 trillion COVID stimulus package made it clear that the government was pumping money into the economy. Fears of currency devaluation and the search for an economic hedge against inflation prompted investors to diversify their investments into Bitcoin. By the time lawmakers were debating the stimulus bill, Bitcoin was already close to a new all-time high of $58,000.
Also, Bitcoin seems to pique the interest of many. As more and more people begin to adopt the idea of digital assets and digital currencies, the search for answers about Bitcoin continues to grow. In a comparative Bitcoin adoption survey carried out by The Tokenist, about half of millennials said they were eager to tap into Bitcoin. A 2020 survey by Fidelity Digital Assets, the digital asset arm of the financial services firm, found that nearly 36% of the 800 institutional investors surveyed across the US and Europe are investing in digital assets.
After Tesla’s purchase of $1.5 billion worth of Bitcoin, 10% of the automaker’s cash reserve, the pioneer cryptocurrency surged to new all-time highs. Elon Musk’s Twitter advocacy for cryptocurrencies might have equally boosted the search.
It’s worth noting that the number of active Bitcoin addresses on the Bitcoin blockchain was 766,597 according to blockchain.com. More people are transacting on the blockchain as Bitcoin eclipses gold. The known holdings of gold ETFs have reduced since mid-2020. Bitcoin has continued to gain traction among institutional and retail investors.
Though more people have been affected by the pandemic in comparison to active Bitcoin addresses, it appears that, somehow, Bitcoin is a glimpse of hope.
As analysts predict that the coin will hit $100,000 this year, many people are asking questions.
What are your thoughts on Bitcoin, and its future as the pandemic continues? Will it push the market forward in 2021? Let us know in the comments below.