The spread of the novel coronavirus (COVID-19) has ravaged the global economy significantly. Lockdowns and restrictions on air travel will affect many industries, and that has led to a tanking economy. The virus has now been declared a pandemic by the WHO, so it has had some serious effects on the policies of the world’s major nations to take drastic measures to curb the increase in cases. The hashtag #StayHome has been trending on both mainstream and social media, to encourage people to social distancing in order to prevent the further spread of the virus via community transfer.
The issue of containing the virus seems no longer possible, especially in countries like Italy, Iran and Spain were the virus quickly spread. It is overwhelming their healthcare systems and led to declarations of national emergency. Experts agree that the main way the virus is spread is through social contact. An infected person can potentially spread the virus to three other persons they come in contact with. The virus is not the same as the flu, it is a different strain of the coronavirus that is related to SARS. It can spread like the common cold and the flu, but the symptoms can turn from mild to severe. The most severe cases require ventilators to help patients breathe. Scientists are discovering more about the virus, and this can help researchers find a solution or way to mitigate the problem.
One way the virus can be spread is through cash i.e. paper currency. This has been the case in China, where authorities there have been either disinfecting or destroying paper currency. The amount of time the virus can survive on surfaces also depends, but if it can last more than a day (24 hours) on the surface of paper currency, that it is a cause for concern. It can happen quickly enough that there won’t be time to disinfect it. It is not like every store that accepts cash will suddenly take the time to disinfect the money they accept or give back as change.
In a typical scenario of virus transmittal by paper currency, an infected person who handles the money makes a payment at the store. The clerk at the register takes the money and the virus transfers to the clerks hand. Now the transmission to the clerk can be the moment the clerk touches their face and the virus finds a way in through the eyes or nose. Once the virus gets into the clerk’s body they may not immediately show symptoms. In fact, some infected persons appear asymptomatic or show no signs of the virus until much later (14 days according to most medical experts). The virus is further spread by the clerk when handing back change to the store’s customers. It then begins to spread through the rest of the community as someone comes home from the store. You can catch it from shaking hands too, the reason for elbow bumps.
The WHO is now advising us to use forms of electronic digital payments as a precautionary measure. It is contactless, meaning there is no physical contact involved that could lead to virus infection. Paying with a credit or debit card at the store is an example. Other ways to pay are online, via an app. Some stores and restaurants will accept electronic payments and then allow customers to pick up their order. It is still risky to even go out and have items handled at the stores, but electronic payments can help as another way to avoid contact with the virus. Self checkout of items at a supermarket using a card payment method appears to be the most ideal way. The important thing to remember though is for everyone to wash or sanitize their hands after any transaction. Once the virus gets on your hands it can easily spread. It is also important to not touch the face, rub eyes and avoid habits like biting finger nails.
It is still wise to be careful though. This is because you still have to be alert since this gives hackers an opportunity to victimize more people. Make sure that you connect to a secure link that always uses HTTPS. Sites like Amazon provide this by default, but make sure that you are connected to the correct site. You can check to see if there is a padlock icon next to the website name. It should show HTTPS in the web address as well. If your browser does not support this protocol, your connection is vulnerable because it leaves your data exposed (e.g. credit card number, etc.). Check that the app you installed from your merchant is also legit. This can be verified by the vendor’s website. If you are already using Apple or Samsung Pay, you have biometric authentication for more security.
Now it leads to the question, will cryptocurrency become more valuable during times like pandemics?
As we have seen in the news, once the virus was declared a pandemic and seems beyond containment, the market crashed on Wall Street and other financial markets around the world. This led to dumping of stocks for money. The lockdowns have also had a major impact on the economy, leading to loss of livelihood for many workers in the entertainment, restaurant, service and retail industry. Generally any job that requires social interaction, as social distancing has been encouraged by authorities to stem the possible worst case scenario projections. Panic from the mainstream media reports have led to more fear, uncertainty and doubt i.e. FUD.
The cryptocurrency market did not do any better, but even worse. Bitcoin (BTC) and the altcoins crashed as well, with the value of Bitcoin dipping to a low of $4,106.98 on March 13, 2020 with previous highs from $9,937.40 back on February 23, 2020. It is not just about the weak hands pulling back or whales dumping, the sentiment was due more to the bleak outlook on the economy. People dumped their cryptocurrency back to fiat currency. In times of crisis, people don’t buy cryptocurrency. Instead it is the opposite. It followed the Dow Jones fall and stock market crash in this case. If you have ever heard any cryptocurrency trader or influencer say that things are going to get worse before they get better, that is a fair assumption.
There is another viewpoint though that with crisis comes opportunity. While everyone else you know maybe dumping their stocks or cryptocurrency, there are others who are buying at the dip (as traders call it). It becomes a buying opportunity, like a sale on something that was once expensive to buy. When Bitcoin fell from $9,000+ to < $5,000, some traders viewed this as the time to buy and accumulate more coins. This gives some traders a chance to finally have 1 BTC in anticipation of greater value in the future (much like investing in a stock but without dividends).
It seems apparent though that cryptocurrency is not valued as a medium of exchange. In times of crisis more people were selling their cryptocurrency and not using it for electronic payments. The use of cryptocurrency in making payments is still not mainstream. In fact, cryptocurrency is more important as a store of value than for making payments. Imagine if the banks suddenly suspend your funds during a pandemic and there was no way for you to take it out. In this case having cryptocurrency would be ideal by exchanging it for fiat currency or making transactions. You also have some of your assets in digital form and thus you have value that can be exchanged later.
At this moment it is more a question of what is practical. If you had to buy toilet paper right now, would you be willing to spend it in BTC or ETH? Another question is, will the store accept your payment in cryptocurrency? The answer to both questions is usually no. Electronic payments using fiat currency stored in a bank account is still the preferred method, not from a digital wallet that holds the value of cryptocurrency. What seems obvious thus far is that in crisis mode, people will stick to what is familiar in order to get by.