The Impact of Coronavirus on Cryptocurrency

The Impact of Coronavirus on Cryptocurrency

We have officially hit the mid-week of April and yet, everywhere across the world, people are battling for their lives while the rest are sitting ducks aside from the protection of our own home. Coronavirus, the infectious fatal disease that was first started in China has made its way around the world within just a few weeks and has impacted various sectors including cryptocurrency. 

“Indeed, the virus seems to have severely impacted financial markets in other corners of the global economy.”

 

A Walk Down Memory Lane

As everyone is well aware of, the first attack began in China around November 2019. What was thought  to be an internal problem began to raise concerns as the virus started to conquer other countries as well. As you know it, few deaths lead to hundreds to thousands while schools, colleges, shopping malls cease operation and finally, everyone goes into hiding mode. So, what now? 

 

Global News

It seems to be a bad day every day for the economy. Apart from the stock market plummeting down, Bitcoin exchanges join the race as well. However, the cryptocurrency market has partially recovered from the crash recently. 

 

No Place Like Home

The restriction movement implemented in almost every infected country requires people to stay at home and limit contact. This would likely create various positive outcome. Already, the air is fresher and streets are cleaner. It is certain that this trend would boost the adoption of digital coins as well. 

 

COVID-19 Cocktail

Several prominent representatives of the cryptocurrency community were infected after an Ethereum conference. This incident was a catalyst agent for other blockchain conferences to postpone until further notice whereas, some events were unfortunately cancelled. Such a heavy financial blow for the organizers.

 

Mining

China holds the largest share in Bitcoin mining, around 70% due to the availability of cheap electricity and technology devices. However, the Coronavirus pandemic has caused the mining operations to face difficulties. The constraint supply of digital currencies would hopefully increase Bitcoin and other cryptocurrencies might increase, but then the extreme shortage of the digital currencies could also have the potential to backfire. 

 

Bitcoin Price

When coronavirus was revealed that it was indeed an extreme threat to humanity, people start to panic and move their assets from fiat currencies and other markets into BTC. Theoretically, if this continues, the price of Bitcoin will increase. Unfortunately, it does not seem to have a price-boosting effect as predicted.

 

Stablecoin

On a positive turn of such events, the use of stablecoins has increased amidst the corona outbreak. Stablecoin is a digital currency pegged by stable assets such as US dollars. For example, USDT and USDC. The fact that stablecoins have less price volatility is probably key to people’s confidence with stablecoins’ store of value compared to Bitcoin. 

 

“Financial rewards exist for those that appreciate the risks and opportunities created by these disruptive assets. There is power in humility and opportunity within crisis.”

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