Digital Currency Revolution Series: Is Concept of Crypto Playing Its Role of Safe-Haven Amid Economic Crisis Owing To Pandemic Covid-19?

Bitcoin was incepted during the last financial crisis at a time of massive bank bailouts during 2008-09, inflation, and the central bank intervention. Q1’2020 was dominated by coronavirus, massive government stimulus packages, and slashes to interest rates.

Although the mild attempts of recovery, the entire global market has still been apprehensive owing to the pandemic Covid-19, having total reported death cases exceeds across the world, especially in the US, Italy and Spain, the death toll outpaced Chinese numbers long back due to this deadly contagious coronavirus, many countries are still locked down with a trauma.

However, the bitcoin price has stabilized and bounced back infact again from the lows of $6,456 levels to the recent highs of $7,217 levels. Although the bitcoin price has stabilized and attempting to create upside traction, the minor dips cannot be totally ruled out. 

On the flip side, the deadly coronavirus has affected almost of walks of lives in this world. Amid such a lingering threat to the turbulence of FX markets and risk averse sentiments within the safe-haven trajectory, it’s been quite essential and sensible to empathize the concept of the global currency driven by the robust blockchain technology.

eToro, the world’s largest social trading platform, has come up with the quarterly report that emphasizes on the crypto market’s progression over Q1’2020. Wherein the key inferences were highlighted in the report: 

• Amid  macroeconomic uncertainty, online conversations continue to increase around crypto-assets as an alternative asset class. 
• Relative and absolute mentions of gold in headlines discussing Bitcoin have reached all-time highs. 
• As the coronavirus started to dominate conversations in Q1, Bitcoin sentiment became significantly more correlated with gold than with the S&P 500.

The outbreak of a novel coronavirus (2019-nCoV), which originated in the central Chinese city of Wuhan, has already spread to the extent that it will have an adverse impact on global economy for sure. The Economist Intelligence Unit revised its baseline forecast for many countries and now poses a massive risk to the global economic outlook due to this pandemic. 

On a broader perspective, referring weekly plotting of BTCUSD technical chart, from April'16, the BTC has spiked from $414 to the all-time highs of $19k, currently, trading at $ 7.4k mark, which is still 1,660% rallies. When this is the case with BTC, could we still fairly criticise the performance of the pioneer cryptocurrency? 

We agree that under the circumstance of great macroeconomic uncertainty, Bitcoin’s digital gold narrative has reached its apex. Courtesy: eToro