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Has the Coronavirus been negative for Bitcoin?


The Coronavirus crisis seems far from over. And it is that, after several months of increases and falls in the number of infections. Most of the countries of the world continue to suffer the consequences of the virus on their economies and populations. However, not all sectors have been affected in the same way. For that reason, today we wonder if the Coronavirus has been negative for Bitcoin, or if, on the contrary, the cryptocurrency has been strengthened.

The effects of the Coronavirus

For humanity, the pandemic generated by the Coronavirus has been one of the greatest challenges we have had to face in the last century. And is that, the disease born in the Chinese city of Wuhan, has caused the loss of countless lives. Infecting millions of people around the world, and forcing the establishment of extreme measures such as quarantines in order to preserve the health of society.

This has led to the practical collapse of the world economy, with all countries suffering to a greater or lesser extent severe recessions this year. While industrial and commercial activities are interrupted due to the social distancing necessary to fight the virus in the absence of a vaccine.

Of course, this slowdown in economic activities has had a significant impact on the financial sector. And especially in banking institutions whose fundamental activity, the granting of loans to companies and individuals, has been diminished during the pandemic. A problem that has also deepened with the low interest rate policy of central banks.

However, the negative effects of the Coronavirus have not impacted all sectors equally. Well, while the traditional economy has suffered the ravages of the disease. For the Blockchain technology sector, and especially cryptocurrencies like Bitcoin, this has been a period of great activity.

The Bitcoin situation

And it is that, it has been in the context of the pandemic when the usefulness of Bitcoin and cryptocurrencies has become clear. Filling the space left by the global financial slowdown, by allowing users to start using BTC as a mechanism to send and receive money quickly and easily, as well as an active store of value.

«The pre-pandemic demand was largely speculative (…) People saw that Bitcoin was performing spectacularly and wanted to be part of that game (…) But I think the post-pandemic is beyond speculation. Rather, it is: “This thing has a fixed circulation, it won’t depreciate.” People are concerned about the outflow of dollars and wondering if they should hold cryptocurrencies in addition to gold as a store of value«Commented DBS Chief Economist, Taimur Baig.

Thus, during the Coronavirus crisis, there has been an increase in the adoption of cryptocurrencies around the world. What can be clearly seen in the action of large institutional investment firms like Grayscale. Which have acquired millions of dollars in Bitcoin for their clients interested in investing in crypto assets.

The price of Bitcoin seems to indicate that the Coronavirus has not been negative for the cryptocurrency. Source: CoinDesk
The price of Bitcoin seems to indicate that the Coronavirus has not been negative for the cryptocurrency. Source: CoinDesk

Therefore, although without a doubt, the Coronavirus has generated damage that is impossible to heal throughout the world, including the crypto world. We can affirm that the pandemic has generated the perfect context for Bitcoin and Blockchain technology to demonstrate their positive attributes. Which, at the end of the day, has had a positive impact on BTC, increasing its adoption and its price.

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