- Currently, the coronavirus is considered one of the main reasons why the Bitcoin price has fallen below USD 8,000.
- In the long term, the coronavirus could reveal the true value of Bitcoin as a result of a global economic crisis.
The coronavirus is on everyone’s lips in the global financial markets. The stock markets in Europe and the U.S. are currently suffering the worst days since the global economic crisis in 2008, with the Dow Jones falling more than 2,000 points yesterday due to fears of the coronavirus spreading and an oil price war. The S&P 500 also plummeted by 7.6%.
Contrary to the expectations of many crypto experts, however, the Bitcoin price also suffered heavy losses and has fallen to below 8,000 USD since its rejection at the 10,200 USD resistance zone. The thesis that Bitcoin is a hedge in times of crisis, a “safe haven”, has thus not (yet) been confirmed. However, the tables could still turn for Bitcoin, if Satoshi Nakamoto, the inventor of Bitcoin, is right.
Is the coronavirus to blame for the crash of Bitcoin?
Whether the coronavirus is to blame for the crash of Bitcoin is currently on everyone’s lips. There is no sure answer to that question. However, it is a fact that the panic on the global financial markets is certainly not entirely innocent in the collapse of Bitcoin. Both the trading volume and the open interest of Bitcoin Futures has dropped significantly since the hysteria surrounding the coronavirus.
On the other hand, there are currently significant other reasons for the price drop of Bitcoin. In particular, the further liquidations by the PlusToken scammers, one of the largest fraud cases in Bitcoin’s history, seem to be a plausible explanation for the selling pressure on Bitcoin. Nevertheless, for many the obvious culprit seems to be the spreading coronavirus.
With regard to the global financial markets, however, it should be critically questioned whether the entire financial system has not contributed to the current situation. In recent years, the central bank system has been printing money incessantly, which on the one hand puts the economic system on a shaky foundation and on the other hand leads to inflation, the expropriation of the citizen. This is precisely why Satoshi Nakamoto published Bitcoin in 2009.
A global economic crisis as a true test for Bitcoin?
Bitcoin was designed in response to the global economic crisis and collapsing systems to help people secure their wealth in times of crisis. Therefore, the question now is, has the idea of Bitcoin failed? The answer so far is quite clearly no.
The outbreak of the coronavirus can have a significant impact on the price of Bitcoin, because Bitcoin needs financially and physically healthy people. Dismissed employees can no more afford to buy Bitcoin speculatively than they can afford to save dollars. In the event of an economic crisis, however, the big moment for Bitcoin could come, as popular Twitter personality Hodlonaut also noted:
11 years have passed. Bitcoin is here now. The bailouts are about to start flowing again, this time on a whole new level. The circumstances Bitcoin was made for are coming full force, a perfect storm. Let’s see what happens.
Broker eToro US also pointed out on Twitter a few days ago that the next global economic crisis will be the real test for Bitcoin, as a hedge in times of crisis. The coronavirus could play a macabre role in this:
They say history repeats itself but this is our chance to shine in the crypto community.
Sep 2008 recession: Lehman Brothers collapses and emergency fed rate cut.Satoshi then releases bitcoin white paper.
March 2020 economic downturn: corona virus disrupts the global economy and emergency fed rate cut.
May 2020: Bitcoins 4th halvening. The fed is drastically increasing the money supply to facilitate this emergency rate cut. Bitcoin’s Halvening plans to do the opposite. #disinflationary
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