Bitcoin, the largest digital asset by market value, is enjoying an impressive start to 2020 and some crypto market observers believe the digital currency is acting as a safe-haven amid fears of the spreading of the deadly new coronavirus from China.
However, the novel coronavirus is affecting crypto assets in some other, surprising ways.
“From the informal MeetUps held during the initial days of Bitcoin to the extravaganzas at the height of the crypto bubble, gatherings have been a key for wooing investors. NiTROn2020 in Seoul, Hong Kong Blockchain Week 2020 and Token2049 have been postponed,” reports Bloomberg.
Bitcoin, the largest digital currency by market capitalization, has its share of critics and supporters. Integral to the case of expanded acceptance and use of the digital asset is conveying to investors that bitcoin has a store of value properties, whether it be by measuring intrinsic or monetary value.
“Crypto lending startup DeFiner was reported to have canceled a 10-city tour investor because of the epidemic that has swept through parts of China,” according to Bloomberg. “Mining pool BTC.top, whose computers help verify transactions, said one of its server farms was shut down by Chinese authorities seeking to prevent the virus from spreading. Equipment makers including MicroBT, a maker of gear used by mining farms, said they are delaying shipments.”
Bitcoin’s historical volatility trends, which have ebbed somewhat, have often prevented some market observers from calling the digital asset a safe-haven on par with gold, but the coronavirus headlines could be prompting some investors to revisit that thesis.
Coronavirus originated in China – one of the epicenters of the crypto universe – and that’s important for traders at a time when virus headlines are dominating daily news flow.
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“China has been the epicenter for the crypto sector almost since the introduction of Bitcoin in 2009,” reports Bloomberg. “Twenty of the top 50 crypto exchanges are based in the Asia-Pacific region and accounted for about 40% of Bitcoin transactions in the first half of 2019, according to data from Chainalysis. Within the region, most exchanges are in China, the research firm found.”
The rise of China, demand for privacy, rising interest for alternative investments and headwinds among traditional assets are major factors that will continue to fuel demand for cryptocurrencies.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.