Crypto Banks Answer the Call Amid Coronavirus-Fueled Economic Decline

Coronavirus effects can be seen everywhere. From traditional companies to technical giants like cryptocurrency banks, it has shown mixed kinds of results in every industry. Whatever the state is, it’s clear that the economic decline is not going to sort anytime soon.

Every business is affected by this pandemic. The economies around the entire world are sinking rapidly. Cryptocurrencies are volatile but the virus has left a significant effect on the growth of technical gold.

Almost all companies and employees are forced to work from home. And they don’t know when they are going to have their coffee in the office. Some of the companies are also shutting down frequently than ever before.

So, even though cryptocurrency can face uncertainty anytime, it is obvious to have significant effects on the crypto banking system. Let’s find out whether the effect is going to be positive or negative.

How SoftBank Is Going Through the Coronavirus Crisis?

A corporate giant SoftBank is also facing its worst times due to the pandemic. But this is not the only loss this company has faced until now. The SoftBank Group Corp. which is the parent company of Fortress Investment Group is one of the biggest names in the crypto industry.

Apart from its renowned status, it is also the biggest crypto company in Asia.  After a huge loss of $130 million in 2017, the crypto giant is again going in the dark. According to the resources, the company has reported a loss of 12.5 billion dollars in march 2020.

Galaxy Digital

SoftBank is not the only one that is facing loss. Galaxy Digital is a cryptocurrency bank that is facing the biggest loss this year. In addition to the pandemic-related crisis. The company has also faced financial losses in the year 2019.

The company reported a loss of 32.9 million dollars in the fourth quarter of the year 2019. That was the fourth loss in that year alone. Soon after leaving the 2019 losses behind, the year 2020 hit every crypto company with the virus.

The crypto company has claimed that the losses have not affected the operations much and they have asked the employees to work from home. According to another report, the Galaxy Digital has laid off 15% of its employees, and that shows the corona storm has struck the company at a deeper level.

Is the Loss Faced by Crypto Banks Is Way More Than Traditional Banks?

Crypto banking is affected by many factors already let alone the pandemic. Some investors were hoping that degradation in traditional funding will raise the crypto industry. But these investors are now disappointed. Since crypto banking is also on the verge of losses.

This effect was also seen on the Bitcoin, the largest circulated cryptocurrency in the world. Although cryptocurrency prices are rising even during the global crisis, the growth is still juggling with the traditional banking system. The situation has reached a point where growth has become a topic of debate between the investors and observers.

The continuous spread of the virus has affected both traditional as well as crypto banking. Because it has disturbed the otherwise stable market that was working continuously before the pandemic.

According to the latest consumer data, digital currency can boom during this situation. Whenever there is a situation like this, customers tend to buy bitcoins quickly. This can create a hedge to the financial market.

What Is the Impact on Crypto Banking?

Digital currency businesses are quick to adopt changes. While the virus was spreading like a wildfire, crypto and blockchain companies went decentralized. Even the biggest companies became protective of their employees. According to a crypto bank named Sygnum, their main concern is the security of their employees and customers. After which they are going to plan according to the profit and loss scenario.

Other major crypto banks have reported that due to the decentralized operation the employees can focus on the customers in lockdown. Customer demands have increased since the pandemic began. Some companies have also launched new products during this period. This proves that this period has been profitable too for some crypto banks.

People are more geared towards digital usage because their movement is limited. Since everyone is focusing on digital transactions, cryptocurrency is being used as usual. According to BitPay, an increase of 11-40% is seen in the first quarter of 2020.

Customers are paying bitcoins for various purchases. The pandemic has also shown some positive effects on some tech companies. May crypto companies are trying new crypto products digitally. It can also be termed as the time when new digital finance experiments are on the cards.

For some of these companies, this strategy seems to be working on the bright side. While some companies are eventually shutting down their business. Overall, this situation is not completely profitable or loss.

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