Masterclass: Post-COVID-19: What does the future hold for cryptocurrency?
How the crypto market is responding to the coronavirus
Cancellation of industry events negatively affects the value of bitcoin
Bears receive super profits from the fall of bitcoin
The main cryptocurrency price will exceed the $ 10,000 mark
The coronavirus epidemic has swept the world. As a consequence of the panic that suddenly swept humanity, the stock markets collapsed. Stocks, bonds are rapidly sliding into the abyss. Decrease in production, export and import, purchasing activity of the population after the introduction of the world quarantine threatens to lead to the next world economic crisis, which, as experts promise, will come in 8-9 weeks.
And while oil and foreign currencies are losing their value, cryptocurrencies are gradually recovering from the fall. In just a week after its fall to the level of $ 3800, bitcoin was able to quickly win back positions and today is trading at around $ 6080, that is, the crypto coin has increased in such a short period of time by almost 40%.
How the cryptocurrency market today is responding to the coronavirus epidemic and what to expect in the future, BeInCrypto asked experts.
Maria Stankevich, EXMO Business Development Director:
Without exaggeration, today COVID-19 is one of the most discussed issues, affecting almost all areas of business, including cryptocurrencies. While world leaders are fighting the coronavirus pandemic by closing country borders and introducing quarantines in turn, the stock market is showing volatility. The cryptocurrency and stock markets are closely related. So, last week we saw a fall in the value of the main cryptocurrency by more than 50%. Such a jump may be due to stock market fluctuations, which in turn are responding to fundamental news about the coronavirus. The cancellation of many industry events also negatively affected the course. Of course, the whole community is concerned about the latest events, but I see a positive moment at this stage: after the price rollbacks, after some time there was an increase (in the context of retrospective).
I agree with the opinion of Stankevich Yuri Mazur, Head of Data Analysis Department, CEX.IO Broker. In particular, he noted that the coronavirus had a negative impact on absolutely all markets: stock, commodity, foreign exchange, so it is not surprising that the crypto market suffered from general panic and the desire of investors to preserve their capital in any possible way, including the massive sale of cryptocurrency. Large institutional and retail investors still prefer to keep their capital in cash and not invest in any of the assets, because almost all investment instruments are “unreliable” and volatile ”.
“If we talk about the reaction of the crypto market to the coronavirus, then two trends can be distinguished here: some want to make money on the panic and the fall of the cryptocurrency, the latter are trying to help normalize the situation..
For example, falling bitcoin plays into the hands of bears. Those who initially bet on asset price declines are now making high profits. But that is not all. If you look at the exchanges, in the last few weeks, new coins have appeared that act as a futures contract and offer investors to make money on how many people will die from the coronavirus and how many will survive. In my opinion, this is blasphemous. And I fully share the position of the Red Cross and the world community in relation to such initiatives. A pandemic is not a reason for speculation, ”Yuri Mazur emphasized..
On the other hand, according to Yuri Mazur, large cryptocurrency exchanges are launching their hedge funds for institutional investors to motivate them to invest in cryptocurrency. Such an initiative can really help support bitcoin and other coins during the global crisis..
It is not yet clear how effective these events will be, since the situation on the crypto market changes every day and is correlated with the events that take place in the stock markets. Therefore, until the situation in the world stabilizes, fundamental changes cannot be expected..
And here experienced trader Kir Kelevra I am sure that the coronavirus did not affect the fall of bitcoin in any way, but bitcoin affects the recovery of the market.
“Bitcoin is like a convertible. They do not buy it first, but only when there are one or two other cars. And in the event of a crisis, the convertible is also sold first. This is happening on the market now. As soon as the crisis broke out, investors tried to sell Bitcoin, hoping that other instruments were less volatile. But, as it turned out, this is not true “, – said Cyrus Kelevra.
Bitcoin really plummeted in price, but also actively and is recovering against the background of all other assets.
In general, experts are confident that cryptocurrency copes with the crisis better than fiat money. But one cannot count on the rapid growth of bitcoin or any other cryptocurrency during a pandemic. The level of fear among investors is too high.
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