Impact of coronavirus on Crypto Markets
The threat of COVID-19, well known as coronavirus pandemic started from Wuhan, the city of China in December has led people, institutions, government, media, and finance, to opt for solicitation to restrict the vast impact and effect on society. The outbreak of coronavirus has impacted the economy a lot as it seeks people to stay at home and avoid any personal contact following the quarantine policy as the World Health Organization(WHO) declared the disease a pandemic. Hence, reducing the flow of the work process in various markets including the crypto and share market. China is a hub for tech-centric companies and a wide range of industries operations were dependent on. The impact of coronavirus is just the beginning to be felt and will be long-lasting and to ensure the stability of our medical system it is suggested to flatten the curve of infection.
How COVID-19 is affecting crypto markets?
With the changing factors, no one is exactly aware of the impact of coronavirus on crypto markets and if anyone claims differently, they may be selling a bag of goods. It’s noticed that cryptocurrencies were hardly affected during any global financial turmoil and estimating any points will be null.
Crypto enthusiasts considered Bitcoin and other cryptocurrencies as safe havens and would not be affected by factors. The strict rules and regulations governing the supply of cryptocurrencies protect the tokens from the manipulation of central banks and government to their fiat currencies. The crypto presence and performance are quite pleasing but it changed with the increased number of patients and now experts are calling the outbreak of COVID-19 a black swan as it was seen during the 9/11 US terrorist attack and the 2007-2008 recession.
But over the past few weeks, cryptocurrency markets have seen a huge increase, leading to the renewal of bitcoin prices by more than 20 percentile in less than 24 hours. It is considered as one of the surprising crashes in the digital currency’s history and Bitcoin’s recovery saw it return above $6,000 on Thursday, which was reported and traded to below $4,000 a few days earlier.
Whereas other major altcoins like XRP and BCH have also seen significant price rise as investors returned capital into digital assets. According to the crypto expert and author Glen Goodman, “Bitcoin’s crash was a knock-on-effect of the stock market collapse, as panicked investors sold any assets they had for cash, so they could pay off urgent debts to their broker.”
The status of safe havens by cryptocurrencies is long last and not only the pandemic disease but also the Ponzi schemes, Plus Token led to the drop in prices. It has come into light that investors are showing their interest in safe assets ie.GOLD, hence the price is seen on the increase, registering a 10% increase in December of last year.
As already shared the current price of Bitcoin compared with the last few weeks – a mark of $10,000 recognized and the investors hoped to see the surge in the coming days.
The market, on the other hand, saw a decline in the total market capital within 48 hours starting from the 7th March to 9th March this year.
The decline percentage and amount on 9th March include about fall by 14.4% to $225 billion from $263 billion on 7th March at the same time, though the percentage continues to grow affecting other cryptocurrencies too.
One thing that made investors cleared with cryptocurrencies is – cryptocurrencies are immune to market factors, hence encouraging the investors to remain hopeful and see the rise in prices as with Bitcoin halving approaching May.
The impact of coronavirus so far the coronavirus outbreak has seen more than 358,803 cases confirmed and more than 15,433 deaths though the number of recoveries is 100,645 around the globe. It is even reported that crypto developers have introduced a new altcoin, Corona Coin, which attracted the investor significantly.
The effect is felt in global financial markets and with the spread of the virus; no one is sure what direction cryptocurrencies will take. We can only wait and watch the crypto markets to see what comes next however, the virus is not contained, there are likely to be adverse impacts on cryptocurrencies and stock markets as well.
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