Impact Points: 5 Instances Where COVID-19 Seriously Impacted the Price of Bitcoin
As the government continues to introduce stricter measures to enforce social distancing, how do these key news events and press releases impact the value of Bitcoin?
Last night, UK Prime Minister Boris Johnson made a statement to the nation. This was to inform the public that stricter measures were needed in order to control the spread of the Coronavirus. These rules have been put in place because the previous advisory declarations asking people to stay at home as much as possible wasn’t heeded. In fact, due to recent sunshine across the UK, many had taken outings to country parks and beaches.
And so, we should all do our part. Compliance with these new regulations is the shortest route toward getting our lives back on track.
The statement released on BBC news will undoubtedly influence Bitcoin’s value. We have clearly seen in recent months, any news that details the coronavirus has had a dramatic effect on the original cryptocurrency. But will this cause the price to go up, or take another dive over the next few days?
In an attempt to understand how these press releases impacted the price of Bitcoin, we can look back over the last few months and compare the price of BTC with key news events surrounding COVID-19.
#1 – January 2nd, 2020: Bitcoin Suddenly Dips Below $7,000
Most people believe that the Coronavirus began in 2020, but this is not so. On December 31st of last year, China alerted the World Health Organisation to some severe cases of a strange type of pneumonia in the city of Wuhan. Those affected seemed to be concentrated around the Huanan Seafood Wholesale Market, and this was shut down on January 1st, 2020.
On January 2nd, the price of Bitcoin dropped by $212 to trade at $6,961. A downward trend continued into the next day, where prices sank a further $45 to have the coin trading at $6,916.
This could indicate that by the morning of Thursday January 2nd, news was already circulating about the sudden strange illness that had shut down an entire fishing market the day before.
#2 – January 13th, 2020: World Health Organisation Reports First Case Outside China
The price of Bitcoin shot back up after Donald Trump ordered the killing of Iranian General, Qassem Suleimani. No doubt this was caused by fears of the repercussions that would ensue from the president’s actions.
But, on January 13th of this year, the World Health Organisation (WHO) confirmed that the first case of Coronavirus had been discovered outside of China, which may have caused an upward trend to briefly skyrocket. A woman in Thailand who had recently travelled back from Wuhan had contracted the disease.
On January 14th, the price of Bitcoin shot up quite rapidly in a short space of time by $759, from around $8,100 to trade at $8,859.
This shows that the news of COVID-19 spreading beyond the borders of China had a clear effect on the larger community, who may have felt that it was a good time to safeguard their finances with this decentralised, digital asset.
#3 – January 17th, 2020: Several Territories Around the World Confirm Cases of Coronavirus
On January 17th of this year, 3 separate airports in the United States began screening inbound passengers for the disease.
The second death caused by the Coronavirus was reported in Wuhan, China. The number of those infected was rapidly increasing. Authorities all around the world announced confirmed cases. Aside from China, the most affected were the US, Nepal, Italy, Spain, France, Germany and Iran.
The rapid spread of COVID-19 was clearly having an emotional and psychological impact on investors around the world, and fearing a crash of local economies, many continued to seek the safe-haven of Bitcoin. Over the days that followed BTC continued to climb, eventually exceeding the $9,000 mark.
#4 – March 10th to March 15th: Declaration of a Pandemic
March 10th carried tragic news for the entire world. Both Italy and Iran recorded their highest death toll for those infected by Coronavirus in a single day. On March 11th, the World Health Organisation officially declared COVID-19 a pandemic, as new cases had been discovered in Bolivia, The Ivory Coast, Honduras and Turkey.
The figures announced over the next few days were deeply concerning. The total number of deaths worldwide had reached more than 4,600, with over 126,000 now infected. Spain announced over 2,000 new cases bringing its total number of those suffering from the virus to more than 7,700. Countries that were the most affected, such as Italy, began a courageous effort to stem the spread of the virus by self-isolating in their homes.
These truly terrifying figures possibly inspired one of the biggest sell-offs in Bitcoin’s history. Within a single hour, the price of Bitcoin plummeted, losing more than 20% of its value. Trading briefly around the $4,300 mark, the cost of mining BTC (bringing more coins into circulation) became more expensive than buying Bitcoin.
This could have had serious ramifications on the security of the network itself. Nevertheless, there were mixed emotions concerning this historical drop in price. For those already invested, it was no doubt a devastating turn of events. For those who were considering Bitcoin investment for the first time, the low cost would be quite inviting.
#5 – March 23rd, 2020: Boris Johnson Announces Enforced Social Distancing
On the evening of March 23rd, UK Prime Minister addressed the nation to inform them that stricter measures had to be introduced to ensure public compliance with government recommendations to stay at home whenever possible. This was a necessary step, as many had ignored the advisory announcements given earlier this month.
Today, the price of Bitcoin seems to be on a steady rise again, already achieving a value of $6,780 this morning. If this begins a trend, we could see some significant spikes in the next few days.
All of this is very speculative, but we do seem to identify a pattern. Whenever a news story breaks surrounding this terrible illness, there are great price movements in the days that follow. The trouble is knowing which direction the price will move.
Maybe you can see a pattern for yourself amid the information presented here and use that as a template to formulate a trading strategy of your own.
We have some difficult times ahead of us, and if you are going to use your time at home to trade the cryptocurrency markets, make sure you only invest an amount that you can afford to lose and learn as much as you can beforehand. The trading markets can be fun and profitable but should never be entered in ignorance.
Take time to learn a little and formulate effective strategies. Stay home and stay healthy guys.