Since the outbreak of the global epidemic Coronavirus (COVID-19), It has become unclear the medium and long term impact it will have on crypto markets. To some end, we have seen a massive resurgence in crypto markets, where prices of ethereum, stablecoins, and bitcoin have shot up well over 30% in the past couple of weeks. The rise comes right off the heels of one of the worst crashes in the digital currency’s history where cryptocurrency value was being sold at half the price in a series of panicked sell-offs.
As we keep a close watch on cryptocurrency news and bearing in mind that the global epidemic is slowly reaching its peak, it is crucial to consider what impacts Coronavirus has had on crypto markets so far.
The Rise and Fall in Cryptocurrency Prices
A glance at the cryptocurrency trading over the past 4 months shows that the market has been highly volatile. Crypto markets have seen a boost as a result of the tensions between the U.S. and Iran and then gained arising from the fear of the coronavirus outbreak.
Notwithstanding its latest bull run at about $9, 620, it is yet to match its $20, 000 all-time high in late 2017. While it may be true, if we consider the dismal BTC trader deals early December 2019 up until late January this year, bitcoin’s recovery witnessed a 50% jump in price from $4, 000 to $6,000.
Similarly, other major cryptocurrencies, such as XRP, Ethereum, and bitcoin cash, made significant price gains as investors returned capital into digital assets. Still yet, analysts are cautious about attributing the benefits to the global outbreak. These fears are justified given that in late February, the price of bitcoin soared to about $8,000, and within a matter of hours, it had fallen more than 25% to $6,000.
Thus it remains questionable if cryptocurrency’s pandemic status eventually will appeal as a “safe haven” asset.
Cryptocurrency Conferences Cancelled
With the rapid spread of the virus, it became clear that COVID-19 had grown beyond being an internal problem in China. To this end, the first few blockchain conferences were immediately canceled against the backdrop of the Ethereum conference, where several prominent representatives in the cryptocurrency circle were “infected.”
Fast forward to early March of 2020, almost all blockchain conferences have been canceled or postponed until late summer/fall 2020 and some until further notice. Fortunately, with the aid of modern technology, some of these events can be held within the virtual space. In short, this is precisely the mood of communication agreed on by a majority of industry leaders even after the COVID-19 pandemic.
Raising Funds Becomes Difficult
With the declining prices in the IOC market, blockchain start-ups are now switching their focus to attract venture capital. Conversely, given the spread of the Coronavirus and the blanket of uncertainty over the global economic space, this method of attracting investors has suffered challenges. This is because private meetings have been curtailed, and investors are more careful in the investments they make now more than ever.
Gustav Christopher Wagner, founder, and CEO of market data provider Blockfacts emphasizes it aptly when he spoke on the difficulties blockchain start-ups are currently facing in raising investment funds. He states that as the Coronavirus becomes a global epidemic, interaction with potential investors has been reduced to virtual calls. Although venture capitalists are pleased to hold virtual meetings and provide close-range financing, there has been a decrease in money circulating the niche markets.
Remote Work Becomes Commonplace
Most start-ups, cryptocurrency projects, and their clients have interacted remotely from the beginning. In other words, the global need for working remotely has not caused any significant changes to the blockchain industry. Interactions have continued seamlessly without compromising the quality of communication between the parties.
Also, irrespective of variation in time zones, productivity input/output, and management of remote command crypto markets maintains effective communication. Even if the virus has hard-hit your workforce, the beauty of working remotely is that you can get a ton of useful services online.
For example, if you are in France (one of the hardest-hit countries) and run a cryptocurrency blog, the spread of the virus might have impacted on your work. You can get the best writing services from sites such as Pick The Writer or Writing Judge to keep your crypto blogs up and running.
Effect on Crypto Mining Hardware Supply Chain
Another impact the Coronavirus has had on the crypto market is the supply of crypto mining. More customers have experienced delays in shipment from crypto mining hardware manufacturers due to the coronavirus lockdown in China.
These crypto mining operations primarily require hardware and energy to operate, so they require spars management or human activity. However, mining manufacturers are limited by the need to either self-isolate or quarantine to curb the spread of Coronavirus. What this means is that since crypto mining is not considered as an essential service, the supply chain in getting equipment to consumers has been struck due to the factory and border closures.
The Stablecoins Benefit
One class of crypto that has greatly benefited from the spread of Coronavirus is Stablecoins. This class of cryptocurrency has witnessed an increased interest after the outbreak of the virus. The reason behind this is not far fetched from the fact that stablecoins have less price volatility in comparison to digital coins.
Also, people have more confidence in the future value of Stablecoins than in bitcoin or other digital currencies. Amid the growing pandemic, consumers across the globe are patronizing stablecoins. These stablecoins are used for trading in the crypto market activities, in addition to accomplishing a variety of tasks.
As events unfold, most analysts warn that the full impact of the coronavirus outbreak is yet to be felt. By both the traditional financial markets and cryptocurrencies markets. Despite these projections, there is the certainty of recovery.
While the possibility of an immediate recovery may disappoint many looking for quick riches, cryptocurrency digital asset class is here to stay. However, whether you are out to make some quick buck or wait till the market stabilizes, don’t forget to #StaySafe.