The leading blockchain intelligence firm is in the blockchain news again. We are talking about Chainalysis, the firm which has recently found that COVID-19 is a pandemic that negatively affects the Bitcoin price. As Chainalysis claims, the pandemic and global economic contraction is affecting the Bitcoin (BTC) consumer habits in surprising ways.
A new report published on March 30 shows that the company details how the Bitcoin spending trends in three areas have changed (or reversed). The areas included merchant services, gambling and darknet marketplaces.
Chainalysis reported that one such change in trend shows a resilience among Bitcoin merchant services during the current economic crisis. For instance, the data that Chainalysis has for Bitcoin spending using merchant services from July 2019 until March 9 shows that there was a strong and positive correlation between the BTC price and the expenditure.
In other words, Chainalysis claims that the more Bitcoin is worth, the more likely holders are to spend it. Since the start of the COVID-19 outbreak, the positive correlation has weakened by roughly half, and the total value of the expenditure has declined.
All of this indicates that BTC holders are probably spending less during the decline of Bitcoin. The decrease is less dramatic than was otherwise expected. This is because since the outbreak, the strength of the correlation between price and behavior which also weakened.
So, while the decline in the price of Bitcoin (BTC) continues to lead to reduced spending, it does not do so as significantly as it did in pre-pandemic times. Chainalysis claims that this weakened correlation means that the price is not dictating the consumer behavior as strongly as it did before all of this.
Even darknet marketplaces show that since the outbreak, people are struggling and using Bitcoin less. As the crypto news intelligence firm said, there is an explanation for this:
“Recent reports point out that Mexican drug cartels are having a harder time sourcing fentanyl, as China’s Hubei province — a hub of the global fentanyl trade — has been hit hard as the epicenter of the outbreak. Such disruptions […] could be hampering darknet market vendors’ ability to do business.”
Previously, a Chainalysis report revealed that the volume of cryptocurrency flows on darknet markets had doubled in 2019 for the first time in four years.
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