Cryptocurrency

Bitcoin is strong enough to support the world economy in a Coronavirus-crisis?

Currently, a major economic recession threatens the world, the Central banks will do everything to support the expenditure, thanks to the money printing and potentially negative interest rates.
A factor, but you have not in Hand, is the spreading of Coronavirus, which has on the Asian markets gradually devastating consequences – in spite of his apparently rather innocuous consequences for the human organism.
How can play with Bitcoin here is a (positive) role?

Bitcoin and the Coronavirus

The Coronavirus could make the world economy worse than the SARS outbreak of 2003. This is due to the fact that China is a much bigger player on the global markets and the fact that a financial crisis threatens.

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Bitcoin represents in the eyes of many analysts a glimmer of hope that seems to be currently against the negative effects of the market is immune, such as Bitcoins increase in shows about $ 10,000.
The ongoing debate around Bitcoin revolves around the question of whether or not the asset crisis of value in times of economic a good Hedge or not.
Even large news agencies mention this Theory again and again. If the Coronavirus is from the economic strong – is Bitcoin strong enough to act as a stabilizing effect?

A blow to the economy

It may sound strange that a respiratory disease has a significant impact on the world economy – however, it is the first Time that we see something like this.
The outbreak of SARS in 2003, also began in China. Its impact on the economy are well documented: they have cost the world economy $ 40 billion.
More worrying is that China is now a very different place than in 2003. The economy of the country has risen from the sixth largest to the second largest up. China is also the most important growth engine of the world economy, the International monetary Fund estimates that China alone has accounted for in the year 2019 39 percent of global economic growth.
The Chinese economy was slowed down by the Virus significantly, and traveling in the country were severely restricted. The damage will spread to the Rest of the world.
The question now is, of course, how long this eruption will last and how well it curbed can be. China has sealed off Wuhan, the epicenter of the outbreak, effectively. In 11 provinces there was even an extension of the Chinese new year holidays, in order to keep the workers at home and to prevent the spread of the Virus.
It is estimated:

“The economic impact will focus on the first half of the year 2020, with a decline in global real GDP of 0.8 percent in the first and 0.5 percent in the second quarter.”

Bitcoins ability to increase

The spread of the Coronavirus was brought in earlier this year falsely with rising Bitcoin prices. Allegedly, Bitcoin should be able to somehow benefit from the outbreak, which is absurd. The Consideration should rather be: Bitcoin may be able to bridge a gap in the world economy, which is hit by this crisis, perhaps.
The seemingly negative correlation of Bitcoin with the traditional markets has highlighted the importance of the asset in uncertain times. And now, where the Coronavirus has a negative impact, allows Bitcoin an Option, which does not necessarily including, if China’s economy is slowed down.

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.

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