China, is amongst the top crypto investment hubs that has most of the crypto exchanges of the Asia-Pacific region, therefore such a virus outbreak posed a huge blow on the economic status of China. As such it has potentially disrupted business, both in the traditional market and in the crypto market. To make matters worse, the spread of Covid-19 has been declared ‘Pandemic’ by the WHO (World Health Organization). Following the news, the Asian and the European stock markets fell drastically. Bitcoin, as well as other cryptocurrencies, are also having a tough time since the virus outbreak in China.
Is Crypto safe?
No, Crypto is not safe. Though many analysts were of the opinion that Crypto would be inversely correlated to stock markets, in reality, people experienced a different scenario altogether. It is a common human nature that during periods of crisis, investors adhere to the non-sovereign assets and currencies so as to safeguard their wealth. But at the same time, it is also true, that during the times of uncertainties, when economic confidence is attacking cryptocurrencies, no one would want to keep trading positions with risky assets when it is not even clear whether or not the economy will ever recover from the aftermath of the deadly Coronavirus.
Apart from Bitcoin, whose prices plummeted dramatically to 1/3rd of its value, other leading cryptocurrencies like Ethereum, Bitcoin Cash, XRP, etc. also experienced significant losses, following the Covid-19 outbreak being declared as ‘Pandemic’ by WHO. Bitcoin, which was once considered as a “safe-haven” asset, is now gradually losing its significance and to this, Simon peters, a renowned market analyst at eToro remarked, “Previously seen as a possible safe haven in difficult times, investors now seem to be selling out to take back liquidity in case the Coronavirus spreads even further. In a time of uncertainty, many investors might feel it is better to own cash or gold rather than more speculative cryptocurrencies like bitcoin.” In fact, for the most notoriously volatile cryptocurrency like Bitcoin, which even traded around $20,000 back in 2017, this is one of the most severe crashes that plunged the prices so mercilessly.
Does Coronavirus impact Bitcoin halving & future?
Bitcoin halving reduces the sell pressures from the miners, thereby creating an imbalance in the demand and supply, which yet again facilitates a dramatic price escalation in cryptos. With few people buying cryptos during the crisis period and most of them wanting to sell off their crypto holdings with a focus to safeguard their wealth, mammoth headwinds are facing the bitcoin and crypto markets. However, many analysts are of the opinion that there is a limited impact of a halving because of the pricing action. Apparently, people’s behavior before, during, or after a halving coincides more with the increasing levels of speculation that exists in the economy with an underlying shift to sell off their crypto holdings.
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