Bitcoin, trading near $10,000 in mid-February has dropped below the $4,000 mark just one month on.
One of the most significant factors behind the ailing market stems from the fact that China is among the world’s top crypto investment hubs – possessing most of the crypto exchanges of the Asia-Pacific region. Considering the origins of Coronavirus, its outbreak has caused severe economic ramifications to China as a whole. As a result, business in both traditional and crypto markets is struggling.
Market jitters have been further compounded by COVID-19 being formally recognised as a pandemic by the World Health Organisation. The news sent Asian and European stock markets tumbling. Bitcoin and the wider world of cryptocurrencies have been caught up in the turmoil, but does Coronavirus mean for investors? Could there still be investment opportunities out there? Does the current state of the market offer the opportunity for some sound value investments?
Given the highly speculative nature of the biggest cryptocurrency players, it will be a matter of months before we’re likely to see much confidence in the market surrounding the likes of Bitcoin and Ethereum. Facing up to this reality, investors have been seeking solace in stablecoin markets until the signs of a bear market have been banished.
The dangers posed by Coronavirus
China is a major player when it comes to cryptocurrencies. 65% of current miners are based in China, and most of the largest manufacturers hail from the nation too. This points towards some severe long-term problems when it comes to production.
Coindesk reporter, David Pan, and DeFiner CEO, Jason Wu have forecast a bear market in the immediate future of both Bitcoin and cryptocurrencies alike.
In terms of hash demand, Bitmain, Canaan, MicroBT and InnoSilicon have all been reporting delays in production as a result of COVID-19. The pressure on the aforementioned organisations had already been increasing in the build-up to Bitcoin’s much…