Financial products of all kinds are sensitive to political decisions, tensions in the currency market, or economic crises. In particular, the price fluctuations characteristic of many cryptocurrencies can be influenced by negative reports as well. Moreover, the spread of coronavirus has almost no contribution to the rates of many cryptocurrencies.
Cryptocurrencies & Media World: A Never Ending Story
In the past few months, news regarding the rapidly spreading coronavirus has dominated the media world. Negative news from the Asian region, which is so important for cryptocurrencies, is always a bad omen for the price development of many digital currencies. To make matters worse, there were reports of a large mining farm that closed its gates out of fear of the disease. Important crypto conferences were also canceled in the short term.
However, these reports don’t seem to have any influence on the price development of Bitcoin and many other cryptocurrencies. On the contrary — Bitcoin exceeds the limit of $10,000, and altcoins, such as Ethereum, have grown by 50 percent since the beginning of the year. In the past, much more harmless reports could cause significant price fluctuations, which leads to an issue of correlation between external influences and cryptocurrencies rates.
Coronavirus Affects the World: What About Bitcoin?
It’s only last October that China’s President Xi Jinping was able to ensure a short-term price increase of 40 percent with his positive comments on Bitcoin. In the past, however, various hacks of crypto exchanges or government bans on digital currencies have caused prices to fall. Thus, we can assume that negative reports of coronavirus also have an impact on the rate.
However, since the beginning of the year, the prices of most cryptocurrencies have increased. Bitcoin, in particular, has returned to values above the $10,000 mark after a long dry spell.
It’s therefore clear that the effects of the pandemic affect not the exchange rates of the currencies but people themselves. So far, however, the effect of the pandemic is not so fatal that reports could have a serious impact on cryptocurrencies.
Conclusion: Coronavirus is a Problem for Humans, But Not for Bitcoin
Cryptocurrencies of all kinds can be influenced by reports in the media like any other financial means. Even a suspicion of a possible ban or regulation by state authorities caused prices to fall in the past. Positive statements from well-known personalities or politicians spontaneously created a spirit of optimism. But recently the influence of many reports on the rates of most currencies seemed to be decreasing. About 7,000 confiscated laptops from a mining farm in China in December 2019 didn’t result in a negative swing in the price trend.
That is, many crypto projects can no longer be affected so easily. Bitcoin in particular appeared to be sustainable recently. Among other things, this could be related to increasing acceptance by US stock exchanges and a spreading use as a digital currency in payment transactions.