To say that Coronavirus is the only factor impacting the economy will be an overstatement.
Newsmakers, analysts, strategists, and decision-makers around the world earlier believed that the impact of Coronavirus is much larger than what it is made out to be but with the markets finally coming back to normalcy the opinions might differ. The illustration below shows the essence of the volatile markets until they started to normalize.
When fears of Coronavirus were still hot, traders of cryptocurrency were facing highly volatile markets due to the spread of the virus. The number of virus cases reported in the rest of the world has exceeded the spread in China which has given rise to new fears. But, on the global economy in general, the virus is certainly leaving no stone unturned to instill fear and lack of confidence.
The global economy is slowing down and with the fear that Coronavirus is spreading leading to a universal deceleration, all the benchmark indexes are dropping by the day. S&P 500 index has already reduced by an alarming 10% since 2020 began. Bitcoin or BTC as we know it is also burning its fingers with the mighty downfall of cryptocurrency trading below $9000. The over-the-counter (OTC) volume trading of cryptocurrency albeit became higher as the virus has been constant news in the circles.
Cryptocurrencies like Bitcoin did suffer a minor setback due to sell-off but they are now showing resiliences as the indexes continue to slide down. Bitcoin experienced a slump this week but one thing that is definite is that they are just able to stay afloat if not take butterfly leaps. Look at how Bitcoin strongly came back after experiencing some serious fluctuations.
Cryptocurrency price is determined based on the market factors of demand and supply. They have an indelible impact as they provide several economic advantages namely:
- Transactions without the involvement of banks
- Faster and secure transactions can be conducted
- Cheaper to use
- Lack of government protocols
Different locations have experienced different setbacks. Australia which is located close to the Asian countries has been highly influenced by the virus leading to a discernible drop in trading. There are several strategies being employed to counter the effects one of them being removing holds on the cryptocurrency assets until they are needed.
Talking about China specifically, despite trading of cryptocurrencies being stable, the outbreak has influenced its technical upgrades, travel, business. The Chinese government major Chinese cities faced a shut down with many employees from the blockchain business been asked to work from home.
The experts say…
Many crypto experts have enumerated that one specific event will not have any bearing on the currency as there has been no correlation analyzed to date. One event cannot be conceptualized as a catalyst for its doom. Crypto is currently seen in a safe haven unless there is a monetary policy gone wrong!