The past few years have seen an immense expansion in cryptocurrencies globally. More people are gradually gaining interest in the cryptocurrency market, and cryptocurrency firms continue to gain a more remarkable customer base globally.
2020 is, by far, the year where cryptocurrency platforms marked a record high, with the onset of COVID-19. Such firms include Ripple, whose price marked a double increment in November 2020 alone. Ethereum (ETH) is also among the platforms that have grown massively in 2020. In recent weeks, Ethereum hit $597, a historical high since mid-2018. Since the beginning of the pandemic, ETH prices have increased by four times.
Bitcoin remains an unbeaten platform in the cryptocurrency market. Currently, Bitcoin has the highest market capitalization, $336 billion. Ripple follows at $48.5 billion, while ETH has $40.6 billion.
Recent Market Changes Impacting Cryptocurrencies
The increase in the price of various cryptocurrency platforms is due to various factors. Since the pandemic began, people are forced to spend more time indoors as a safety measure. Subsequently, most people are gradually shifting focus and interest to cryptocurrency platforms like Bitcoin and ETH.
However, the growing interest due to the pandemic could be equally disastrous. Working with cryptocurrencies requires lots of technical know-how. Devoid of this knowledge, people may end up investing wrongly, resulting in huge losses.
The inflation of the US dollar has been on a steady upward trend. The dollar suffers insufficient purchasing power due to this inflation. Investors are now embracing safer investments in the form of precious gems and cryptocurrency. For most investors, now is the best time to go for safe-haven assets.
Additionally, cryptocurrencies are becoming more popular and globally-acceptable payment methods. In Paypal, for example, plans are underway to incorporate cryptocurrencies, including Bitcoin, into the payment system. Other payment platforms, like CashApp and Square, already allow cryptocurrencies by the buyers and sellers.
Security has, for a long time, been a primary issue for most cryptocurrency users. With the high insecurity, cryptocurrency customers have made huge losses in the past. High-end hackers keep coming up with new ways of illegally accessing cryptocurrencies.
Currently, most cryptocurrencies are incorporating new technology to boost their security. ETH has come up with a smart contract account to enhance automation in the payment process. ETH buyers should ensure the legal verification of their smart contracts for better safety.