Right now, the world is going through one of the harshest crises it has ever faced. We are referring to Coronavirus, the disease that arose in Wuhan, which has already caused thousands of deaths. This without counting the financial damage that it is generating around the world, and that has even impacted the price of Bitcoin. Leading the crypto community to question its position as a haven of value.
Is Bitcoin a haven of value?
Bitcoin has evolved steadily since those early days of 2009. When, after being created by Satoshi Nakamoto, a small community of crypto enthusiasts, it collaborated on forums and Internet chats, to create the ecosystem around the first cryptocurrency. of the world.
Since then, Bitcoin has gone from being a curiosity for fans of Blockchain technology, to becoming a currency accepted by hundreds of businesses around the world. Being able to use the cryptocurrency to acquire goods and services, trade, or even play in the multiple existing Bitcoin casinos, such as on this site. Thanks to the security and trust that this virtual currency provides, as a secure payment method for its users.
However, over time, the narrative around Bitcoin has been changing. Going from being just a decentralized alternative to traditional fiat money, to becoming the mind of crypto users an asset haven of value.
That is, an asset whose price does not have a direct correlation with international financial markets. So, in uncertain times, when markets crash, the price of these assets must be maintained or even increased. A pattern that the crypto community began to observe in Bitcoin, which earned it fame as the “digital gold” of the 21st century.
The effect of Coronavirus on the price of Bitcoin
This narrative of Bitcoin as a reserve asset of value has been on the rise in recent years. Leading to important figures of the crypto community such as Anthony Pompliano, they began to consider Bitcoin more as a refuge of value than as a currency. Passing this function to be in the background.
A situation that is beginning to change due to the influence of the Coronavirus. Well, although initially the majority of the community considered the unfortunate disease to be positive for the price of Bitcoin.
The past few weeks seem to have broken with these hopes. Well, the moment Covid-19 reached the western world, causing the stock exchanges around the world to collapse, the BTC collapsed along with them.
Thus, and after having lived through a major bullish rally during the first two months of the year, Bitcoin lost all the ground it gained in January and February, with a 49% drop in its price in less than 24 hours. A catastrophe in the crypto market that fueled the debate.
Well, although over the days the price of Bitcoin has been recovering its price prior to the fall of March 12. The truth is that this fall should never have happened. Well, the logic of value reserve assets is that, when an event that threatens to affect the world economy such as the Coronavirus occurs, capital will seek refuge in these assets, increasing demand and therefore its price. Just what crypto analysts forecast in the days leading up to the crash.
None of this happened. On the contrary, while gold suffered an initial shock, it almost immediately recovered its habitual behavior as a refuge of value. Bitcoin has experienced high price volatility in recent weeks, due to the uncertainty generated by the Coronavirus. Contrary to the robustness expected by the crypto community.
What will happen to Bitcoin after the Coronavirus?
All these movements in the price of Bitcoin pose an important question for us. What will happen to the cryptocurrency once the Coronavirus crisis is over? And, in recent weeks, more and more analysts of the crypto world have been withdrawing their support for the Bitcoin thesis as a haven of value.
However, this might not be entirely bad for Bitcoin. Since, in recent years, the cryptocurrency has been increasingly seen as a purely speculative financial product. Abandoning its initial goals of becoming the replacement of fiat money worldwide.
Therefore, the debate generated around Bitcoin, from the Coronavirus crisis, could be a moment of reordering within the crypto community. Which allows it to redirect its efforts towards improving the platform, and expanding its adoption by more and more users. And not so much to its quality as a refuge of value.