How is Corona Affecting the Bitcoin Currency Valuation

It was March 12: everyone, even those a little bit interested in cryptocurrencies, had the shock of their lives seeing Bitcoin plunge.

As the global economy is trying to make sense of the impact of the Coronavirus, crypto analysts all over the world are talking about different outcomes this situation might lead to.

Answers to several questions might lead to answering the main one: what will happen to Bitcoin in the future.

How long will Corona's impact last?

As we already know, China, Korea, and the US are the countries most affected by COVID-19 so far. However, a global pandemic is "global" for a reason. Countrywide lockdowns all over the world cannot go unnoticed.

Naturally, we can view the impact of Coronavirus in different perspectives: industries and people's lives. People stay at home so that the healthcare system can tackle the pandemic; at the same time, whole industries have to shift gears to stay afloat.

While the news updates are flowing, we can do nothing but estimate how long the situation will last. Trump is planning to open up the country by Easter, but this is a very optimistic estimate.

Corona will likely circulate at least till Summer, then die out, and hit again in Autumn. Yet, the economic effects will persist for much longer.

How does Bitcoin relate to the global pandemic of COVID-19?

Similar to the online casino industry​, Bitcoin and other cryptocurrencies are more independent from the global geopolitical situation than traditional stock markets. But as we see, the digital currencies still react in volatile times.

On March 12, the Dow Jones Industrial Average dropped, which in turn accelerated the volatility in the Bitcoin valuation. Bitcoin plunged by 50%. This price-drop has even exceeded the low point of 2019. Investors do not want to deal with high-risk assets at uncertain times.

Some analysts and crypto experts were genuinely surprised that Bitcoin failed to act as a "safe haven" in times of uncertainty. But then, it is natural, as digital currencies are not usual exchange or purchasing options for people. People do not use  Bitcoin to buy stuff yet.

What should we expect?

The deciding factor for the Bitcoin price is its supply-demand ratio. The volatile stock market or GDP has nothing to do with it. This is the reason that most experts think that the Bitcoin price will stabilize.

Experts were predicting Bitcoin halving during May. However, Corona might delay this halving cycle. The reason for this is that the manufacturers in China will not be able to provide more efficient tech for mining at least for several months.

Predicting the behavior of digital currencies, even with educated estimates, during such events as Corona, is impossible. Many experts say, that whoever promises to predict Bitcoin volatility is outright lying.

Conclusion

Bitcoin and other digital currencies are still new. People are still figuring out how they act during strange market developments. Analysts get surprised at the anomalies the reactions bring.

To think about it, Bitcoin hasn't even been around during the 2008 global crisis.

The only constant in this uncertain world is Change. So we can only do our best to follow the developments and look out for opportunities.