Not only is humanity going through one of the hardest moments in history due to the Coronavirus, but the crypto market is also going through a time of transformation. As the increase in the volume of Bitcoin exchanged on major exchanges during the first quarter of the year makes clear.
It is a time of change for the entire planet. The expansion of Coronavirus has forced most of the countries of the world to implement drastic measures to protect the life and health of its population. What has interrupted the normal functioning of commercial and productive activities.
And if the number of deaths caused by the Coronavirus were already dramatic enough, the economic damage caused by the necessary measures to deal with it would now be added. With the sharp collapse of financial markets around the world, and the promise of a global recession of a magnitude never seen before.
A situation that of course has also affected the crypto market in various ways. Unlike the stock exchanges whose collapse began only in mid-March, the Bitcoin market has been considering the effects of COVID-19 on the price of the cryptocurrency, even since the first days of the year.
This when many analysts of the crypto market began to predict that the advance of the Coronavirus would have a positive effect on the price of Bitcoin. Well, the increased levels of uncertainty in the markets that it would bring, would lead investors to seek refuge for their capital in value reserve assets such as BTC.
This belief was part of the momentum of the bullish rally that the crypto world experienced during the first month and a half of the year. However, it was later shown that the Coronavirus had not redirected capitals from the traditional market to the crypto market.
On the contrary, the uncertainty that the price of Bitcoin should increase, was actually a fundamental element to explain the collapse of its price. With the arrival of COVID-19 in the west, BTC lost 49% of its value in less than 24 hours. Falling at the same time as the main stock exchanges.
Bitcoin volume exchanged increases
However, both phenomena, both the bullish rally in the first months driven by crypto trader speculation, and the collapse and subsequent volatility in the price of Bitcoin, have brought with them an unexpected effect. We are referring to the increase in the volume of Bitcoin exchanged on major exchanges.
Thus, a study carried out by The Block on the 22 main exchanges in the world, has revealed a 61% increase in the volume of Bitcoin exchanged in the first three months of the year, compared to the last three months of 2019. Moving from $ 96 trillion to $ 154 trillion.
An increase by speculation?
Of course, this result is logical, considering the intense speculative activity in the market during these first three months. As traders tried to buy Bitcoins during the bullish rally, in anticipation of a further increase in its value. Or sell them, as soon as the Coronavirus began to impact the crypto market.
Despite this, and as can be seen in the graph, this increase in the volume of Bitcoin exchanged on the main exchanges, rather than an extraordinary figure, represents a return to the volume reached during the second and third quarters of 2019. When it was managed to trade 169 and 155 billion dollars respectively.
For the time being, it is clear that the average price of Bitcoin in each of the rooms does not have a crucial importance in the volume of transactions.
Well, with a minimum difference between the last quarter of 2019 ($ 7,987) and the first quarter of 2020 ($ 8,311), there was a substantial increase in the volume of transactions. So, probably, the determining factor in these cases is the speed of the price changes.
Finally, it remains then to ask ourselves if this increase in the volume of transactions will be maintained during the rest of 2020. Or if, on the contrary, it was a peak that will dissipate as it returns to values closer to the last quarter of 2019. A question that must necessarily remain unanswered for now, in a time of so much global uncertainty.