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How COVID-19 affected the the ICO projects

The COVID-19 pandemic has caused a lot of problems for the world economy and financial institutions. And cryptocurrencies did not escape the consequences.

Postponement of initial coin offerings

The Gaming challenge token Decurian has taken the crypto world by storm. Even though it seems that every project right now states that they are different from the rest and makes promises that it cannot keep, Decurian positively surprised even its developers. The token was valued 4 times more than during its ICO release. Companies are called crypto-unicorn, when they hit the 1 billion dollars valuation mark, while not being listed yet.

Pandemic has slowed down the development scenario for the gaming challenge token. During the period from December 18 to April 1, its price rose by almost 40 times to 215 USD. The team behind it had to move the ICO end date to May 15 2020.

And now the team was forced to change the token launch date to July 1. Founder, Michael Chodorowski commented that the world amidst the COVID-19 pandemic has more important things to worry about than the initial coin offering of a cryptocurrency. He also said the team is extremely happy that they have reached their market cap.

Staying right on track

Cointelegraph reports that the pressure we are under right now may force the majority to pay more attention to tokenization. So in turn these trying times will be beneficial for introducing new financial assets. COVID-19 has shined a bright light on the imperfections of the global economy. And experts say that tokenization may be a good way for businesses to adjust to the new reality.

A lot of initial coin offerings have stayed on track, according to the statistic provided by Investing.com. Coronavirus has not drastically reshaped the roadmap of SMO Coin, BitcoinBlink, Illuminates, Gold Forecasting Placer, Zetanet, ThorChain, Electronig Energy, and others.

Impact of COVID-10 on cryptocurrency market
Impact of COVID-10 on cryptocurrency market

ICO scams are on the rise due to coronavirus

Regulators all around the world try to raise awareness about the rising number of scams. In a lot of cases, it is harder to track cryptocurrency and it means that the criminals may get away with fooling innocent people. There are a lot of legitimate platforms that raise money for healthcare and develop products that may ease the COVID-19 pandemic. However, a lot of the sites, suggesting purchasing products that prevent coronavirus are scams. Be careful and pay attention to trusted reviews when you see some platform advertising supposedly new technology and raising funds via initial coin offering. During these difficult times, people may feel desperate but try to keep your head cool to save your money. If the promised returns are too good to be true, maybe the ICO is a scam. And the way it is set up will make it difficult to return the money.

Read also: Top ICO projects that failed miserably

Even though the crypto community has faced some hardships along the way, people do not lose their hope to «go to the moon» or their sense of humor. The pandemic has brought an abundance of so-called meme coins. For example, ERC-20 tokens are called CoronaVAXcoin (CoVAX20) or Cure Corona (CC19). The market has slowed down but who knows what 2021 will bring us next.

Post-Pandemic Weakens Crypto Space

COVID-19 bailout may have crippled the efforts that the market has made to strengthen the new regulatory framework. The number of regulations has never been this high yet they may undergo some major change in the nearest future. Last year there were dozens of statements from regulators, ministers, and governors – all leading experts tried to introduce cryptocurrencies to a wider segment of users by adjusting laws and entering new rules. At the same time, now that the planet is trying to recover after the pandemic, authorities in some parts of the globe, including the USA, are doing all possible to reduce pressure from financial sectors.

A year ago, when the coronavirus was in full swing, the U.S. government declared that it was ready to collaborate with several regulatory institutions. Their collaboration had one key mission – to make it simpler for banks to adjust the loan terms and modify them accordingly.

U.S. representatives dealing with the banking system have finally taken all necessary measures to fight the financial damage that was increasing due to the outbreak of COVID-19. Ex-president Donald Trump made some radical changes and involved Federal Reserve. Lately, regulators have announced that they have made certain modifications so that financial bodies could reduce pressure on their debtors. Federal Reserve declared that the decisions it has made will let the banks reduce interest rates. They will also make adjustments to the loan terms. In some instances, banks will offer payment deferrals or prolong the terms.

The latest decision was of utmost importance since it led to zero percent interest rates. More than that, the government invested in private sectors and eliminated reserve requirements. From now on financial bodies can modify loan terms and provide a limitless number of loans. They will not need to worry over the FDIC-insured deposits. A few weeks ago, though, the situation was different. There were a lot of financial regulations.

Interest rates in the US and Their Impact

Cryptocurrencies gain popularity, but whether it will be easy to adapt them or not depends on their characteristics. As a rule, they boast low costs and their reach is global while there are hardly any delays. They are compatible with many platforms since their architecture is open. More than that, they are safe and secure to use.

If a user buys a dollar, he then should be able to redeem it for an actual currency. However, if there’s no government backing, it causes trouble and makes it harder for people to adopt crypto.

The government is willing to support small businesses. The program’s main point is to protect the nation by providing zero interest rates. Without the private sector, money transfers take months. With fintech that would last shorter. As time passes, the U.S. dollar weakens and the cash that reaches the business owner will have lost part of its value before it reaches the individual. Cryptocurrencies are great for investors who look ahead and predict the consequences.

The number of user-centric companies is still great. What crypto offers is a blockchain approach. Transacting needs smoother integration and social experience. The press reports that the supply of crypto keeps growing at a tremendous speed and the impact that the pandemic brought has greatly changed the market’s patterns.

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