Risks of Bitcoin Correction Grow on Positive Moderna Vaccine Trial

Bitcoin was trading higher ahead of the New York opening bell Monday but risked shedding its intraday gains on Moderna’s latest announcement.

The tech-savvy pharmaceutical firm updated earlier Monday that its experimental coronavirus vaccine is 94.5 percent effective in protecting people from catching the infection. That marked the second successful trial seven days after Pfizer and its partner BioNTech also showed 90 percent efficacy in their COVID-19 trial.

Bitcoin initially reacted negatively to the Pfizer vaccine news on Monday last week as its price fell by more than $1,000 within a few hours into the announcement. Nevertheless, on the same day, billionaire investor Stan Druckenmiller claimed that he owns Bitcoin. His statements counterbalanced the said downside risks.

Bitcoin recovered later into the day.

Uncertainty Remains

A vaccine that effectively cures coronavirus expects to remove the necessity of social distancing.

Therefore, it allows the sectors that rely on close physical interactions — airlines, travel, manufacturing, entertainment, etc. — to return to normal. The global economy has a better probability of rebounding faster as long as there is a shot available to curb COVID-19.

A working vaccine also allows investors to reduce their appetite for riskier assets. It is the same reason why Gold, a safe-haven rival to Bitcoin, recorded its worst single-day decline on the day Pfizer claimed a successful trial. There was not a Stan Druckenmiller to save the precious metal.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT
Bitcoin chart showing its attempts to hold a price floor above $16,000. Source: BTCUSD on TradingView.com
Bitcoin is attempting to hold a price floor above $16,000. Source: BTCUSD on TradingView.com

Meanwhile, questions remain about the vaccine’s efficacy, cost, and distribution. The slower it reaches the people, the higher is the probability of investors to keep their one leg in safe-havens like gold and Bitcoin. The prospect of more stimulus…

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