Over the past month, the cryptonews have been showing the link between crypto and coronavirus, especially after a lot of the stimulus checks were used by investors to fuel the BTC price. In the months since the novel virus gained global visibility, governments around the world responded by taking drastic action.
The global outbreak which now counts more than 350,000 deaths at a global scale, has been labeled by the WHO as a pandemic on 11th March 2020. This had a significant impact on the economy and the link between crypto and coronavirus has been evident as more countries have gone into lockdown mode, shutting down businesses and places where people may congregate in large masses.
Amid these conditions, the financial markets have certainly responded. Stocks went down and dropped to historic levels – in fact, the drop was so drastic that it was seen as the worst one since the Great Depression. Therefore, the link between crypto and coronavirus strengthened as more people pulled out money from their investments and decided to buy cryptocurrency.
Meanwhile, the most dominant cryptocurrency out there, Bitcoin (BTC), has experienced a sharp drop on March 11, after which it rose to new highs at around $10,000. Currently, the Bitcoin news show that the BTC price is stable above $9,000 but needs new momentum to make its rally to five-digits.
Many times, the crypto and coronavirus connection has been described by analysts as a safe haven asset. They depicted cryptocurrencies as something that investors flock to during times of geopolitical turmoil, using their stimulus checks.
One major draw of digital currencies is that as a rule of thumb, they don’t correlate with traditional asset classes such as stocks and bonds. Many experts actually delved into this topic and there was a paper titled “Bitcoin: Ringing the Bell for a New Asset Class” which shows details on this topic.
All in all, the coronavirus scare has had a substantial impact on the global economy and the financial markets. It forced many businesses to shut down and caused asset values to decline. Cryptocurrencies have also been affected, falling in value and moving in the same direction.
However, market observers expect that this stock market crisis will motivate more investors to flock to Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) and other digital assets.
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