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Coronavirus, bitcoin and the stock market: the different reactions
Coronavirus, bitcoin and the stock market: the different reactions
Crypto

Coronavirus, bitcoin and the stock market: the different reactions

By Stefania Stimolo - 1 Mar 2020

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With the spread of the Coronavirus and the related precautions and concerns, a real scenario of confusion has arisen even in the crypto market, led by bitcoin, and the stock market. 

Here are some examples of beneficial and precautionary initiatives, surveys and fake news statements that lead investors in a state of possibly unfounded scaremongering. 

The different reactions of crypto operators before the coronavirus

Changpeng Zhao, CEO of Binance, continues to support the Chinese population of Wuhan, the global red hotbed of the virus, through the Binance Charity Foundation platform engaged in the purchase and delivery of medical supplies. 

Not only that, the CZ billionaire remains active on social media, supporting the population with tweets of a more moralistic nature. 

The more practical and pragmatic Coinbase exchange preferred, instead, to prepare a document dedicated to its employees on how to behave in case the coronavirus arrived in the offices.

This is a plan in which Coinbase describes its response to the coronavirus by dividing it into three phases: actions that will take place according to the number of people infected and the situation. 

Other characters have preferred to investigate the reason why this theme of the Covid-19 virus should affect the crypto world, such as Nathaniel Whittemore who created a survey on social Twitter collecting 1500 responses. 

It seems that the majority of the responses identified 4 interpretations that would make the virus of interest to the crypto world: 

  1. We’re “sky is falling” types/prophets of doom;
  2. We’re more hedging-macro-risk oriented;
  3. Belief that BTC can/will act as safe haven;
  4. All of above.

Coronavirus and markets: are they really related? 

Moving the focus on the price of bitcoin and stock market values, it seems that the Coronavirus has triggered several reactions.

Only in the US, panic among investors has caused sell-offs of shares and an increase in the purchase of safe-haven assets such as gold. The value of US stocks has fallen dramatically, with the worst week since 2008, while the price of gold has risen, with values it hadn’t seen in seven years. 

The price of bitcoin, on the other hand, seems to have suffered an initial decline, but in the same week, it recorded a change in trend and went up again, dragging with it the other most popular cryptocurrencies. 

In this context, the president of the USA, Donald J. Trump, posted a tweet on Wednesday sounding the alarm not about the coronavirus but fake news, trying to calm investors’ panic:

 “[are] doing everything possible to make the Caronavirus look as bad as possible, including panicking markets”. 

And then Trump tasked Vice President Mike Pence with coordinating the US government’s response to public health concerns.

Similar is also the opinion of the young founder of Ethereum, Vitalik Buterin, who in one of his tweets on Thursday, said that 95% of the news stating that an “event X will make crypto go (up | down)” are fake news:

 

 

 

Stefania Stimolo
Stefania Stimolo

Graduated in Marketing and Communication, Stefania is an explorer of innovative opportunities. She started out as a Sales Assistant for e-commerce, and in 2016 she began to develop a passion for the digital world, initially in the Network Marketing sector, where she discovered and became passionate about the ideals behind Bitcoin and Blockchain technology, which lead her to work as a copywriter and translator for ICO projects and blogs, and organize introductory courses.

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