Exploring Bitcoin's Resilience in the Face of the Coronavirus Pandemic

What is the relationship between Bitcoin and the Coronavirus?

Coronavirus can definitely be the main symbol of the year 2020. Whether you believe the virus is extremely dangerous or whether you believe the virus is something we can easily live with without too many restrictions - the decisions made by governments around the world have changed the lives of many, and the majority are suffering financially, emotionally, and even physically from such decisions.

So how is it related to Bitcoin?

Around the 13th of March, Bitcoin has lost half of its value in 2 days, from $9,000 to less than $4,500… the world was in shock back in those days. Why?

Because on the 11th of March 2020, the World Health Organization (WHO) announced and declared that the Coronavirus is a pandemic. That declaration sent the stock market into free fall and Bitcoin was part of it.

Investors during these days were worried we’re going to see corpses on the streets, and that the world is going to face a major event that it hasn’t seen for many years!

[As a side note, speaking of investments and how to protect yourself from falls in the Bitcoin price - we’ve discussed in great length the importance of having the option to convert your Crypto as soon as possible to USDT at times like these - the US Dollar is usually gaining when the markets are ruled by fear, as it’s known the greenback is a “flight to safety” currency and you can read how to prevent yourself suffering from a Free Bitcoin Price Fall in this article.]

11 March 2020 - Tedros Adhanom, Director General of the World Health Organization, declaring the Coronavirus is a pandemic and sending the markets into free fall

As of today, September 2020 - the markets seem to have rebounded since, the Bitcoin is touching the $10,000 - $10,500 marks and has erased all its losses since that day in March 2020.

Now, it is not only Bitcoin that has recorded many gains since, many stocks have recorded gains as well, and the market seems to signal it is not so worried about the Coronavirus the way it was worried about it back in March 2020.

So what does it mean - Did the WHO make a mistake calling it a pandemic?

It is very difficult to tell when we can now look in practice on the situation why the WHO decided to call the Coronavirus a pandemic. There is no doubt people died because of this virus but overall the number of deaths in the world in comparison to previous years seem to be the same or even better than before.

A global pandemic is usually something that is causing millions of people to die.

And on top of that, there are claims that many of the deaths reported globally are not necessarily caused by the Coronavirus, at least not directly and perhaps not even indirectly. The CDC aka Centers for Disease Control and Prevention in the US announced early in September 2020 that only 6% of the deaths reported in the US were caused directly by the Coronavirus.

This could definitely explain why the market is not acting in fear now, the world is slowly learning how to adapt to this new virus, and the markets clearly state there is no need to panic. Bitcoin is not in free fall nor the other major stocks such as the FTSE or the NASDAQ.

Back to the question we asked about the declaration made by the World Health Organization, perhaps the reason they called it a pandemic was in order to scare the public or make them aware that life is not going to be the same, at least not in the near future. Scare tactics can be useful if you need the public to cooperate, however at the moment in many cities around the world people protest against their government requesting them to cease the lockdowns and any draconian measures taken against the citizens - it could be perfectly clear why people do that when the markets indicate that things are peaceful and calm and the only ones who don’t seem to get it are the government officials themselves.

What about Bitcoin? What can we tell about the future of its price or the other Altcoins?

As mentioned, right now at the time of writing, Bitcoin is touching the ground of $10,400 and it already hit $12,000 before going down below $10,000 and then coming back to the current level of $10,400 where it is now.

What the future holds - no one knows. But it is quite safe to assume that as of now the Coronavirus is not as deadly as investors thought back in March 2020 (however people losing their lives is a terrible thing and we do not underestimate that by any means whatsoever).

Now does it mean Bitcoin is going to skyrocket from here? Will Ripple go back to the $3 level it hit several years ago? That no one could tell. Whilst the Coronavirus might not be a global threat anymore, the world is having lots of tensions, the US elections are less than 2 months away, the UK has not sorted out the Brexit issues with the European Union, and tensions between several countries and China are on the rise.

The best investment advice we can provide is to take advantage of the current swings in the Bitcoin price, if you are a daily trader then we do expect a lot of small wings up and down which you could benefit from. At a certain point it would change but at the time of writing we cannot see any major event taking place before October 2020.

One last point to note - the reason for the changes in the Bitcoin price are not really clear and it is impossible to predict where it would be long term. In our view, Crypto is definitely going to change the world and it is already changing it - however if you look at Ripple you would notice that despite discussions of Ripple taking over the SWIFT system - the token itself has constantly hovered between $0.20 to $0.30 without major changes.

The rational is not always there, but if you are looking for products with more rational in their price movements then perhaps consider investing in Binance’s BNB token or Crypto.com’s CRO token - these seem to have much higher potential than the Ripple currency itself.