Bitcoin more attractive as the coronavirus spreads, study

bitcoin more attractive

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Bitcoin more attractive as it has recently been proclaimed as a “safe haven” asset which would profit from global economic instability such as the virus’s financial panic.

The world’s largest data provider and crypto analyst, CryptoCompare provides an overview of how investors should handle the current market conditions as a consequence of the coronavirus pandemic.

Some investors are however doubting the effect of the coronavirus pandemic on the cryptocurrency market. However, despite the short-lived process of the pandemic, investors have reacted to cash rather than crypto assets.

Bitcoin more attractive as other assets crash

Gold which has been regarded as a safe haven asset in recent times has declined by 8% since February. The S&P 500 fell 29% while the Bitcoin price fell 30% compared with that of last month, the FTSE 100 fell more than 30%.

In a recent analysis, huge leverage in crypto-markets was a major contributor to the crisis, including over $1.4 billion in BitMEX liquidations alone.

There is still hope for Bitcoin as it is still developing itself as an asset class and can produce significant value as the crisis progresses.

Crypto exchanges respond to market volatility

According to an analysis by CryptoCompare, the study showed a difference during market volatility on the 12th of March between the top-ranked cryptocurrency exchanges.

Although trade is usually compatible with one another, the coronavirus spread helped the perception Bitcoin more attractive that hadn’t been seen since before 2018 during the market crash.

The crypto derivatives market and spot prices have led to a lot of volatility according to the study. Large whale orders have influenced and skewed market prices and promoted even more volatility.

CryptoCompare announced a significant increase in investor use of its data amid the fall in market prices. The CryptoCompare API was used to track an increase in investment interest that was also mirrored in Google Trends’ data by more than two million new daily users.

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Ifeanyi Egede

Ifeanyi Egede is an experienced and versatile freelance writer and researcher on the blockchain space and related matters with published works online and in the print media. He has close to a decade of writing experience. When he is not writing, he spends time with his lovely wife and kids.

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