The recently aired discussion at COSM about the future of bitcoin and other privately minted cryptocurrencies took place last October, before COVID-19 was much thought of in the Western world. Catching up, the cryptos and blockchain had a rough ride earlier this year but they have stabilized recently.
In February, as the pandemic sent markets scurrying, things were looking grim for the cryptos:
During the last week, the spread of the coronavirus has been all over the news; the virus, which had remained well-contained in China, spread throughout South Korea, Iran, Italy, and is now reaching its fingers into other parts of Europe. The New York Times reported on Thursday that “the signs were everywhere…that the epidemic shaking much of the world was being viewed with growing alarm.”
However, the spread of the virus doesn’t seem to have had the price-boosting effect that so many seemed to think it would–as news of the coronavirus’s proliferation has spread throughout the last week, BTC has come hurtling back down, stabilizing around $8,780 at press time.
Rachel McIntosh, “The Impact of the Coronavirus on Bitcoin and Beyond” at Finance Magnates (February 28, 2020)
By March, a writer who covers the crypto and blockchain beat noted that the cryptos’ value rebounded quickly, relative to the stock market. Billy Bambrough thinks that governments’ eagerness to incur massive debt in order to fight the pandemic virus has been pushing more citizens to consider alternatives to government-minted (fiat) currency:
Google searches for bitcoin spiked ahead of the traditional and crypto market crash, more than doubling from the start of the month.
Meanwhile, many bitcoin and crypto exchanges have reported a surge in users and trading volumes.
Billy Bambrough, “Coronavirus COVID-19 Will Go Down In History As The Social Media And Bitcoin Pandemic” at Forbes (March 23, 2020)
However, writer Kyle Torpey, who follows bitcoin, notes that it took longer than gold to recover. Still, he agrees on the main point with Bambrough, quoting Messari co-founder Dan McArdle:
“When the Fed prints trillions of dollars out of nowhere and uses some of it to buy corporate junk bonds, but the government still takes 30 per cent of your paycheck, people start to feel like there’s something wrong with how our money works,” said McArdle. “In an environment where people begin to question the monetary system, alternatives such as bitcoin can draw a lot of attention.”
Kyle Torpey, “The pandemic was bitcoin’s chance to shine. It hasn’t… yet” at Wired (April 22, 2020)
Fábio C. Canesin, co-founder of crypto currency exchange Nash, offered some thoughts on the plummet-and-surge story: Some cryptocurrency firms were caught unprepared for the crisis but, he says, the overall picture is promising:
Cryptocurrencies will become increasingly used as non-correlated investment options. If you look at the recent market crisis…
Read more:Has COVID-19 Helped or Harmed Crypto and Blockchain?
