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Cryptocurrency, COVID-19, and Your Retirement

Several gold coins with the Bitcoin logo sit on a five-dollar bill. The portrait of President Abraham Lincoln on the bill is wearing a surgical mask. The relationship between cryptocurrency and covid is implied.

This winter season brings a triple threat of COVID-19, the flu, and respiratory syncytial virus (RSV), with costs that can impact our finances and the crypto landscape. Over the past few years, the COVID-19 pandemic has impacted the world, reaching every industry, including finance and investing. The connection between cryptocurrency and COVID has become clear.

Ever since businesses were shuttered and fiscal spending programs were brought about to ease the pain, the economic landscape has not looked the same. When many businesses closed their physical doors, digital transformation opened virtual avenues for companies and investors. 

Though COVID-19 highlighted the digital nature of finance’s future, crypto had already been established as a digital currency and investment worldwide prior to the pandemic. Nevertheless, cryptocurrency was impacted by COVID-19, and it’s helpful for crypto investors to understand how retirement savings were affected. 

COVID-19 and the Economy  

During the height of the pandemic, governments and central banks stepped in to lift the markets; stocks and cryptocurrency responded by rallying, finally topping out near the end of 2021. The general rally was due to low rates, extra cash injected into the system, and optimism about how well the economy would recover after the pandemic. 

Nearly two years later, market sentiment began to turn as people saw inflation increasing, and the federal reserve needed to pull back on the support it was providing markets. While the U.S. Federal Reserve had been making purchases since the global financial crisis a decade before the pandemic, the amount of fiscal stimulus deployed caused the demand for goods to rise to unprecedented levels. Toss in supply chain issues, an energy crisis, and rising wages, and inflation was bound to spin out of control.  

A primary way the government controls inflation is by dampening demand, making it harder to borrow money; in other words, raising interest rates. This is what we saw throughout 2022, and is part of what set markets on their downward trajectory. 

Understanding this, many investors are beginning to move assets, like retirement accounts, out of traditional markets because beating inflation has become increasingly difficult. In addition, entire countries like El Salvador are realizing the pitfalls of fiat currencies like the U.S. Dollar, and have established cryptocurrencies like Bitcoin as legal tender. 

Overall, the economic results of the pandemic have encouraged people of all ages to learn more about finance, investing, and how to manage their own accounts. They are looking at alternative investments like cryptocurrencies, real estate, precious metals, and more.  

The rekindled public interest in crypto in recent years helped encourage institutions and regulators to take a deeper look. Today, you see large investment corporations like Fidelity offering the ability to invest in Bitcoin, and regulators working on better rules to protect the public. Ultimately, the pandemic caused the financial wheels of change to turn faster toward accepting this new asset class. 

COVID-19 and Progress  

The pandemic also brought about significant innovation. For example, the inability to work from the office forced businesses to develop much faster than was originally planned. Stores and retailers enhanced their online presence, and other entrepreneurs got creative just to keep their doors open.  

People have also changed how they spend money; more transactions occur digitally than ever before with no sign of slowing down, even as businesses have reopened their physical doors. In addition, corporations are discussing ways to strengthen their supply chains and further transform to streamline operations. 

Another conversation the pandemic helped start is about interest in the metaverse. When businesses closed, and people were relegated to their homes, many looked to screens for entertainment. Being the social and curious creatures we are, people started looking into how to have more immersive experiences at home — thus, we now hear the term “metaverse” everywhere; even Facebook changed its name to Meta.  

Moving Forward with Innovation  

All in all, the pandemic acted as a catalyst for conversations that had not yet been breached, and innovation that had previously been put off for later. Now people in all positions of society are beginning to rethink their approach to many aspects of daily life, including how they invest and do business.  

This enlightenment could increase the use of blockchain application and cryptocurrencies as exchange units. It also has the potential to spark widespread use of Web3 economies — meaning that we may be at the precipice of a significant fundamental change in how we operate as a society.  

As an investor, what is your best course of action about crypto in the wake of COVID? Think about it this way; had you been able to buy Amazon shares back in 1999, what would your portfolio look like now? You may have similar opportunity today, with better access to investable assets. 

To take full advantage of this new technological wave, you can use a tax-advantaged account like an IRA. Bitcoin IRA allows investors to easily invest in more than 60 different popular crypto projects using a self-directed IRA.  

Signing up is simple, your crypto is insured1, and the platform allows you to trade 24/7, as crypto markets are always open. Head to Bitcoin IRA or download the app (Play Store, AppStore) to learn more and open your account today. 

1Security, storage, wallet providers, and insurance may vary based on asset chosen and custody solution available. 

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