Cryptocurrency

Bitcoin and the Coronavirus – price fuelled the fear of actually Bitcoin?

Anyone who is following both our Crypto News, as well as the messages that will be noticed the last few weeks, 2 Parallel: the Bitcoin price rises and the Coronavirus from spreading further. In January alone, the Bitcoin is just an incredible 30% quicker. Not to mention the nearly 90% rate of return from the last year. BTC seems to have a run and to gain strength.
At the same time, the news is full of reports from China. The Coronavirus puts the country in the middle of the fear and terror and uncertainty, also in this country many people. More and more person in and outside of China to put. Like the Asian stock market showed yesterday, the financial markets, the bad news is not unimpressed. Could it be that there is a correlation between the Bitcoin price rally and the outbreak of the Virus? Many experts are of divided opinion. We have to analyze.

Bitcoin Price Rally 2020

We say: the king of the crypto currencies since the beginning of January, and in particular since 3.1, in a very handsome rally. The course could, on the basis of USD 7,000, only the 8,000 and then finally, the 9,000 he conquer brand back. The previous highs for this year, even in the case of over 9,500 US dollars, of which one in the night from Sunday to Monday has been reached. Overall, the BTC price rose almost 30% in January.

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Coronavirus spreads

At the same time we maintain, however, that the Coronavirus is looming since a couple of weeks from China his way through the world. According to Spiegel, more than 17,000 people, “detection are now contractually infected”, 361 of them have died. Outside of China, there have been 146 infections and a death in the family. In Germany, the number of Infected rises to 12. The dark number of people Infected in China could be far higher. So bad the news are, what you have to do with Bitcoin?

Bitcoin: the Safe-Haven Asset?

The spread of the Coronavirus also has more and more impact on the world economy and the financial markets. Many companies in China have extended the holiday after the Chinese new year, any possible Infections in check. This is, of course, to the detriment of the production. The pleasant mood of the investors was revealed yesterday in the financial markets. The Shanghai Composite Index fell after its opening by a whopping 9%.
The Other is pumping the Chinese stabilise Central Bank 173 billion USD in the markets, to do this. This is roughly the current market capitalization of Bitcoin. In short: the Coronavirus seems to bring economically, a lot of mess.
This increasingly negative impact on the economy by the Coronavirus can be considered as a possible reason for the Bitcoin price rally in the last few weeks. It would actually be the first Time that Bitcoin to its reputation as a “Safe Haven Asset” requirements. Already at the beginning of the year, the increasing tensions in the Middle East had been used after the killing of an Iranian General as an explanation for a Bitcoin price increase.

Experts disagree

Whether the speculation of a link between the Bitcoin price rally and the outbreak of the Coronavirus is, white of course, no one exactly. The Situation is therefore much room for speculation by some experts. As Nigel Green, Chief Executive of the financial consultancy deVere Group says:

The continuing upward trend of the Bitcoin price is correlated with the spread of the Coronavirus. (…) The more individual cases are identified, the more countries around the world are affected, and the greater the impact on the traditional financial markets are, the higher the price of Bitcoin has jumped.

Another comment in the same direction comes from Jehan Chu, Managing Partner at the Blockchain Investment and consulting company Kenetic Capital:

To the extent that the trust in global institutions and markets continue to decline, we will witness a highly mobile digital values of the Bitcoin in value will explode.

But not everyone shares this opinion about a possible connection. So in the Crypto-Space known to Mati Greenspan, the founder of quantum Economics assumes that the Coronaviraus has no impact on Bitcoin:

Whatever happens in the stock (markets), seems to have no effect on the crypto market. Crypto is not behaving like a safe haven in the face of the Virus, nor it is sold together with the other risk assets. Rather, it remains completely uncorrelated.

At the end we can’t say at the current time a lot more than the gentlemen of the Green, Chu and Greenspan. Whether actually related or is it just a coincidence, only show the next few weeks. A real correlation between the events can hardly be derived. Until then, it remains to be hoped that there are more positive reasons to be on the development of the Bitcoin price tense. A reason of the Bitcoin Halving in may, for example, is. This is to be expected, many of them already longing and also as a possible reason for the price rally in January is considered.

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About the author

Eve Manning

Eve Manning

A native Texan, Eve first started out as a Finance Analyst and later realized that her true passion was not in trading but in writing. She leverages her experience in the Finance industry to analyse and write in-depth news articles covering the Cryptocurrencies, Economy & Finance industries.