Crypto and Corona (virus)
How has the Covid-19 / Coronavirus affected the global cryptocurrency market and developments since February 2020? This article takes up several actors and features that have taken place during the last six months.
- Corona has not resulted in general bad effects on the cryptocurrency industry, usage and sphere.
- There was an initial drop of the value of Bitcoin as during March and April, but it was stabilised later on.
- Similar value drop took place with other currencies like Ethereum.
- The crypto-market cup has only risen gradually.
- Ideas of digitising national currencies have become more popular.
- In certain countries as Venezuela, the usage of crypto has increased.
- There are diverging and ambiguous opinions if the BTC still can be seen as “a safe haven” and as “digital gold” or if it is has lost these statuses.
According to company Pulsehyip, before coronavirus, many factors threatened the crypto industry, but nothing changed the expansion of the crypto world. Political issues, hacks, scams, government regulations, economic depression are few that can be named among the others. Even though we cannot directly assume that crypto assets will become a solution for the present global crisis, but it can act as a potential tool to save the economic turmoil.
At its lowest, the cryptocurrency market plunged around 50% to $150 billion before restabilising at the current market capitalisation of $175 billion at the time of writing, a far cry from the record $300 billion attained in mid-February. Such volatility calls into question the widely touted argument that such digital currencies are a secure store of value when orthodox assets face adversity.
It is has been analysed that trust and belief in crypto remain stable despite the Coronavirus. According to Cryptocurrency Index study, 1 in 10 Europeans thinks that crypto as Bitcoin is going to be a part of everyday life as when it comes to economic interactions.
Instituional and legislativative changes
- Abu Dhabi (UAE) has simplified its regulatory approach to crypto
- U.S. draft bill matches digital asset types with specific regulators
- Korea’s amended law has legalised crypto ownership and trading
- Germany’s main regulator has classified virtual assets as financial instruments
- India’s top court gave exchanges access to banking services again
- In France, a court decision has made Bitcoin legal tender
- Zimbabwe’s regulatory crypto sandbox will help micro-financing
Yes, one of the new aspects reported in the time of pandemic is the Corona Coin that officially was based on the idea of establishing of 7,604,953,650 tokens in the world representing the estimated population of Earth. The coin’s creators have also tried marketing this coin as a “2019-nCoV relief effort,” by claiming that around 20% of the supply will be allocated for monthly donations to the Red Cross.
However, at the moment, there are no official sings of this project since the website links are showing “error” messages. Also, the original statement via Reddit has been removed.
Crypto Against COVID
There have been several crypto-based charity and help initiatives since March this year. One of them called “Crypto Against Covid ”was performed by one of the largest trading sites Binance.
According to Binance website and information about the initial “Binance for Wuhan” charity campaign, as of March 20, Binance Charity has delivered a number of coronavirus aid products to over 300 hospitals and medical teams in multiple provinces and cities, including Hubei, Sichuan, Guangxi and Shanghai. The items delivered include 366,000 pairs of gloves, 56,800 masks, 9 sterilisers, 173 barrels of disinfectant, 5,280 bottles of hand sanitisers, 20,000 testing kits, 7,850 protective suits, 20,000 pairs of goggles, 388 oxygen concentrators, and 1000 germicidal lamps.
More info via Bitcoin.com
More info via FightPandemics
Scammers have not taken a break.
A negative aspect is that scammers operating with crypto have not been inactive but very active in their ambitions to lure people on the money. At the same time, according to a report that initially was presented to Forbes by the cryptocurrency crime tracking startup Chainalysis, there was a 33% dip in revenue made from bitcoin, in terms of the dollar value of virtual coins. Since the week ending March 8, the average weekly amount being earned by cryptocurrency investment scams and Ponzi schemes (far and away from the two most popular forms of cryptocurrency crime) fell from $4.2 million to just under $2.9 million in bitcoin.
One paper, based on data from CoinMarketCap, states that COVID-19 has a positive impact on the cryptocurrency market efficiency. The mentioned paper says that such findings are in line with other empirical findings and fit the general expectation about most cryptocurrency markets. Furthermore, it was noted that all of the studied cryptocurrencies become more efficient after the spread of this pandemic.
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