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Covid-19 Pandemic Affecting Bitcoin

Currencies / Bitcoin Mar 26, 2020 - 02:55 PM GMT

By: Submissions


Coronavirus continues to cased both economic and health-related chaos around the globe, with major cities and economies almost grinding to a halt as the pandemic takes it's hold on global activity. Countries are being put into a state of lockdown, with residents of Spain, France, Italy and New York in the US all having federal instructions to remain in their homes.

These lockdowns are resulting in job losses, economic crisis' and ever increasing pressure on businesses across the globe to try and stay afloat through these difficult times. It has been a similar scenario for the stockmarkets on an individual country level, as well as on an inernational scale, as market value continues to slide with no real indication as to when the crisis will end. For comparative purposes, the US stock market is now dropping faster than it did in the period of the Wall Street crash. This gives an indication as to how difficult the times are, we are experiencing at present.

Whilst stock markets are baring the brunt of the issues, currencies are also being hit hard - both real and virtual, with bitcoin trading not excluded from the significant drops we are encountering. In fact, recently experienced the hardest downturn since it entered the market 11 years ago - which saw the bitcoin price take a big drop on value. Although it has recovered in the last few days, Coronavirus is continuing to spread vast panic, and this is becoming more and more evident when one looks at the fluctuations this virtual currency is experiencing.

The surge of Bitcoin in recent days is a huge positive for bitcoin purchasers, with the currency hitting a price high for the year, achieving a 35% boost, year to date. People feel that bitcoin could be a positive trade in the current period of global uncertainty, seeing as normal currency rules may not necessarily apply to bitcoin , especially in times like these

(Pictured: Chart showing the growth year to date)

Source: Tradingview

It has also been reported that Chinese investors have become more actively involved in bitcoin trading in recent times. Their economy was hit incredibly hard, alongside many others, with the Covid-19 fallout, and reports suggest that there is a belief that bitcoin is a safe means of hedging their funds and wealth. Whilst this theory is disputed by many, given the current gloab lpandemic we're facing, it's a theory that appears more plausible as the crisis worstens.

Coronavirus first hit China at the end of 2019, and by the early period of February, China’s main stock market (CSI 300) had already dropped by up to 9%. This meant it was the worst opening they have had in over a decade, and gave a clear indication of the troubled times set to follow across the rest of the world, as the virus spreads. The Shanghai Composite index also dropped sunstantially at around 8%, but both markets have now seen a rise, with coinciding with China conaing the virus to a greater degree. Is this a positive sign for the rest of the world?

Despite all this, crypto markets appear to be on the rise, and remain one of the most popular forms of investment at present.

Advice continues to be given, with cash now rarely being accepted, as stores are asking people to pay via card. This is something that is proving very popular in China, as they have also been looking at a means of stopping the spread of coronavirus on bank notes.

China have been using advanced measures in order to cleanse back notes, using ultraviolet light and high temperatures in order to disinfect the banknotes - providing a strong means of stopping the spread of Covid-19. Could this yet be something all other nations look to do also, as a means of stopping the vast spread?

Less people using cash is another reason why cryptocurrency is proving popular - leading to a conclusion that sets up for a very worrying time ahead, for countries around the world. The world faces an economic crisis, but cryptocurrency appears to have been inversely affected on this front - something that ardent virtual currency advocates will take some pleasure from.

By Adam Walker

© 2020 Copyright Adam Walker - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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