*5.1. The Global Epidemic and Inflation Will Accelerate People's Interest in Encrypted Assets*

The COVID-19 epidemic in 2020 and the recession that came with it hit individuals, small businesses and governments in a short period of time, but the consequences of this are also complex, providing opportunities for innovation on the one hand, causing social unrest and economic hardship on the other hand. In terms of monetary policy, the Federal Reserve is moving constantly and its balance sheet is expanding at a very fast pace. The Fed's fiscal deficit reached \$3.1 trillion in 2020 and is expected to reach \$3 trillion in 2021, creating insecure expectations for the population. The rapid changes in society as a whole during this period forced investors to react accordingly and new investment trends are developing. Based on this, our survey shows a significant increase in interest in safe-haven assets compared to the results of 2019, and among the safe-haven assets are cryptocurrencies such as Bitcoin, a phenomenon that is within the forecast range. During the COVID-19 epidemic in 2020, which set back the entire traditional financial market. Cryptocurrencies played a role as a hedge against risk, with Bitcoin being ideal for risk averse individuals in the face of downward pressure in financial markets [82]. Further studies found that bitcoin in both domestic and cross-border entities served to achieve diversification benefits and risk mitigation, acting as a 'safe haven' [83–85]. The cryptocurrency market shows higher levels of cross-correlations with the others during the COVID-19 periods, in which it is strongly cross-correlated itself [86]. From these results, it can be concluded that the COVID-19 promoted bitcoin investments, 63% of the bitcoin investors were influenced by the COVID-19 epidemic in the past year, and it has boosted the price of bitcoin [87].

Based on the analysis of the socio-political and economic status quo, the traditional financial market is vulnerable to severe shocks, and the market is unstable. The Fed accelerates money printing and inflation, and the issue of asset preservation has received more and more attention. Cryptocurrency has quickly attracted attention due to its excellent properties such as security, limitedness, and easy liquidity. Once investors make profits in the encrypted market, they will attract more investment. This is based on the external unstable financial environment make cryptocurrency investment market boom.
