Bitcoin Will Be More Attractive as Coronavirus Crisis Unfolds: CryptoCompare Report
A new report from leading cryptoasset data provider CryptoCompare provides insight into how investors can navigate current market conditions in light of the coronavirus outbreak.
Bitcoin and altcoins are slowly recovering from Mar. 12’s market crash, during which the price of BTC fell below $4,000. A previous report indicated that massive leverage in the crypto-markets contributed significantly to the crash, including more than $1.4 billion in liquidations on BitMEX alone.
However, some investors are questioning the impact of the coronavirus pandemic on the market of cryptocurrency. Bitcoin was previously hailed as a “safe haven” asset that would benefit from global economic uncertainty, such as the financial panic caused by the virus. The report from CryptoCompare claims that investors have responded by turning to cash rather than cryptoassets, despite being a short-lived approach.
While bitcoin is down 30% since last month, the S&P 500 has fallen 29% and the FTSE 100 dropped more than 30%. Gold, also hailed a safe haven in times of market volatility, has declined 8% since February.
The report says that bitcoin is still in the process of establishing itself as an asset class and may generate significant interest as a store of value as the crisis unfolds. In particular, the report highlights the impact of May’s halving event making bitcoin more scarce at a time when most fiat currencies are undergoing inflation due to government money-printing policies.