COVID-19, the virus that has crashed the markets and frozen the world

A review of the crypto status and how everyone can contribute to stopping the pandemic

Our world has forever changed. Though we are yet to see the outcome of this pandemic, namely the cost in lives, social economy, health care professionals, and more. There was a time before the spread of this virus, and there will be unavoidable aftermath. According to Worldometers, at publication time there are over 22k victims and 489k infected people worldwide. The bright side is there are at least over 117k recovered patients.

The social rules will change due to this pandemic. Lessons were learned after the misnomer Spanish Flu of 1918 occurred — a pandemic that devastated the world the same year WWI ended. Though, people have reacted in fear and with delay to the current menace that is still around. Despite our better health care system and developments in medicine in comparison to a century ago, the havoc is real. Markets crashed, distrust spreads, and a lot of uncertainty prevails these days.

What is to expect of the blockchain sector after COVID-19?

Stock Market: Trillions Vaporized

It’s a tough time for stockholders. The stock market has seen how around $12 trillion worth in stocks disappeared during the last month. Value in market assets has gone to the abyss like being sucked by a black hole. Why?

On one side, people have reacted in fear due to the pandemic crisis worldwide. On the other side, massive holders, like some US senators, had precise information about the virus spread that prompted their decision: sell high before anyone else. After that, the selling frenzy escalated quickly.

S&P500 price graph, one of the most representative indexes of the US market. Source: https://es.tradingview.com/symbols/SPX/

When large investors let go of their stocks massively, there is a domino effect. Especially in times of panic, when people have a lot of uncertainty. According to this source, last week’s losses are estimated at $4.3 billion. Such a substantial hit has been unseen since the 2008 recession, and it could get worse. The pandemic is far from being under control worldwide, the next weeks will be critical to determine the complete balance.

It’s best not to be wary. Wait for the panic to end. Be patient.

Bitcoin: the ultimate survivor of digital assets

True believers claim Bitcoin is a financial haven. However, volatility is an inherent feature of cryptocurrencies. Reacting in fear and responding to professional movements, Bitcoin price fell around 40% overnight on March, 12th. Detractors have quickly evangelized that BTC is just another asset, thus it cannot overcome the collapse of the markets. But, they could have rushed to biased conclusions in these times of instability.

Bitcoin 1-month graph. Source: https://es.tradingview.com/symbols/BTCUSD/?exchange=COINBASE

The Bitcoin price has recovered in about 20% of the largest fall. In other words, BTC value is halfway through climbing back to its worth before the panic. Though the landscape is uncertain, we do have some positive facts going on in the crypto world.

According to Binance CEO, Changpeng Zhao, BTC price did not crash recently due to Coronavirus.

On one side, the golden cross of Feb 18, namely the 50-day moving average (MA) passing over the long-term 200-day MA anticipated a potential rise in the BTC market. The price was rising steadily following this market indicator and in advance of the Bitcoin mining halving next May.

Bitcoin bar graph with 50-day and 200-day MAs. Source: https://es.tradingview.com/chart/TnGM9S8W/

On the bright side, both MAs are currently toe to toe despite the collapse of March 12. Thus, the next days are crucial to see whether Bitcoin escalates or not. In the meantime, stockholders, institutional investors, and the public are seeking assets whose value stabilizes.

Gold is the classical go-to haven asset, but there are others like US bonds, silver, corn, etc. In the long run, Bitcoin is attractive due to the more affordable current price.

COVID-19 reveals the true nature of people

Intelligence is no bar to irrationality. People have shown the stigmas of capitalism these days. For instance, stockpiling WC paper like the end of the world was coming. Overbuying is detrimental for our neighbors since the stocks are limited for most everyday goods. To make it worse, in some countries citizens think they are on holiday; and it’s not the case.

We are in quarantine. In other words, people should stay home, follow the health care tips from the authorities and stay informed of the situation by TV and/or internet. Walking around as nothing happened may jeopardize others. The virus has an easy time spreading, therefore, the physical separation is a must. Everywhere, and every time until this ends.

It’s up to all of us to be responsible for the compliance of healthcare tips. Special care for elders, children, and people with heart diseases, since the lethality for people aging +70 is almost 90% in Spain and Italy. Both Mediterranean countries have been stroke harshly by the pandemic with 4k and 7.5k deceased, respectively. Regarding the rest of the population, the virus is far less lethal but should be taken seriously provided that people of all ages have deceased.

Markets and Bitcoin after COVID-19

Times of distrust and uncertainty is to come. Unfortunately, it will yet take some weeks to stabilize the pandemic globally. Until the virus gets under control, there will be more casualties, and the economic recession will continue for a while. The consequences will extend far beyond in the future.

Considering that the USA will make more dollars, the devaluation of the USD could favor BTC and crypto investments. What’s more, the Bitcoin halving coming in May sets another deadline to see how the price evolves. Last time, in 2012, the halving favored a rise in BTC price so there is reason to expect the same. How much can Bitcoin grow in the next months? The future will tell.

Everyone can contribute to making this epidemic end sooner. Follow the suggestions by the WHO, read the news, stay at home, and do not take unnecessary risks.

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Written by César Patiño, PR Manager at Woonkly.

Venture Builder focused on blockchain. Bridging the gap between blockchain and the Traditional World with defi.finance/ NFT Social Network & Marketplace.