Coronavirus Is Infecting Bitcoin
While coronavirus is extending seriously, they continue announcing numerous messages about its impact. However, the worldwide panic grasps not only people’s minds, but also influences the whole working process. A number of countries have already stated a quarantine regime, public places are closed, plants stopped their production, and the tourism industry suffers great losses. Crypto followers have a portion of ‘symptoms’ for their area of interest as well. In any case, digital fans are sure that the father of digital money can never get a fatal diagnosis.
Just a few months ago, crypto enthusiasts predicted all the possible scenarios for Bitcoin’s halving in May. This will be the third halving on the Bitcoin blockchain, but people pay less attention to it as they are more interested in the effect of coronavirus than its halving. The biggest drop in seven years was caused by a new way of selling cryptocurrency, as crypto holders are much concerned about the spread of coronavirus. A number of crypto events and conferences have been cancelled and postponed, so crypto fans are to be patient (although they do not need to get used to it).
Thoughts and assumptions
Speaking about the hash rate, analyzing the average data it is seen that in recent months there have not been dramatic drawdowns, although its growth rate has somewhat slowed. All the markets are under pressure and the coronavirus fear touches crypto prices. The crypto market downtown plus the coronavirus panic have led numerous investors to the position that Bitcoin is not safe.
Another opinion is that Bitcoin is not naturally going down. It is widely known that the media influence is one of the crucial factors in the crypto world. Еhe public is generally defenseless against the media’s influence and a part of people being light od belief are considered to be as easy prey for hype and false hopes. Being under the pressure of ‘the right news’ whales push sellers to get rid of the digital money and play to their script regardless of any kind of diseases or whatever it may be on the global level.
All over the world, investors are hiding in defensive assets and increasing their fiat currencies. Bitcoin and shares of stocks are falling while gold continues to grow. Crypto followers observe that Bitcoin is not a protective asset during periods of global shocks. When the epidemic declines, Bitcoin may normalize its rate. China plays a great role in the current situation and governmental regulations might have crucial impact on the digital mining. The possible closure of mining farms, shutdowns of power plants and problems in the supply of equipment may decrease the hashrate in the short term.
What concerns more or less ‘positive’ consequences, other countries can become more profitable in mining and the Chinese situation provides such an opportunity. Small players obtaining not the cheapest electricity can confidently use the advantage of the decrease in complexity for Bitcoin mining if it does take place.
In conclusion, I want to say
To conclude, crypto experts admit having troubles now and in the short term, but deny the existence of a systemic risk in the world of digital money. The effect of coronavirus will only accelerate natural selection in manufacturing. Moreover, some mining experts claim that the conoravirus situation has nothing to do with the crypto market. The only danger is if the epidemic continues spreading seriously, it might lead to the drop in the hashrate.
However, even following the worst scenario crypto experts assure that the digital money will be able to recover in several months. Seen as a whole, Bitcoin and other coins are extremely cryptographically secure. Users don’t have to worry and what’s more important in the digital perspectives, there is no place for panic. It is not an easy game; one should keep calm in an emergency.