Coronavirus and Crypto: What’s the Connection?
The deadly, mysterious virus that has been reported in China and elsewhere has shaken the world. Most of the 3,000 or so cases reported so far are in China. But what do the coronavirus and crypto have in common?
How Crypto Firms Are Helping
Some of the biggest names in blockchain and cryptocurrency have pledged massive donations. For instance, the Binance exchange has agreed to donate 10 million yuan. That is around $1.5 million.
That money will help to fight the spread of the disease. The pledge was made by Binance CEO Changpeng Zhao on January 25. Reports suggest that they have donated the money to help Wuhan victims of the coronavirus.
Another helping hand comes from blockchain marketing firm Krypital. They announced their plans to start up a donation system based on the blockchain. It will accept Tether (USDT) using the Ethereum blockchain.
The Effect on Prices
Another aspect of the coronavirus and crypto connection is the price. A 6% drop in the Bitcoin price was seen on the Chinese New Year. This has been largely attributed to the uncertainty that is currently being generated by the disease. At the time of writing, a death toll of over 80 has been confirmed.
China is hugely important in the crypto world. This is where most of the big exchanges are based. It is also a mining hub.
The current problems relating to the spread of this virus are having a negative effect. For a start, marketing events and investment gatherings are slowing down. This leads to the worry that the market may dip if fresh money stops entering it.
At the moment, it is hard to tell how much of the price drop is due to the Chinese New Year. This was extended due to the health scare. BTC has had a week of wild swings last week but settled a little over of the $8,600 by the weekend. Trading volumes are also up.
With no clear, direct link between coronavirus and crypto, it is difficult to know what will happen next. Some analysts think that prices will fall, while others aren’t so sure.
While the emergency exists in China, it is worth keeping an eye on the market. Once the Chinese New Year festivities are over, it should become easier to see how the coronavirus outbreak is affecting cryptocurrencies. However, it may be that prices rise and fall in unexpected ways, as the effect of the disease becomes more apparent.