Contents show

Despite the rumors, Bitcoin is far from dead. Even though it has taken a beating recently, BTC’s reaction to the culmination of current events shows exactly why cryptocurrency is here to stay.

coronavirus pexels

Bitcoin Decouples From Stock Market, Coronavirus Fears Remain

 

It was another wild week in the world of crypto as the price of bitcoin (BTC) snapped back from 10 month lows, gaining a relieving 14% over the last 7 days. The rest of the crypto market followed suit, with many top tier coins roaring back with double-digit gains. As of Friday morning, Ethereum (ETH) was up 13%, Ripple (XRP) up 9%, Bitcoin Cash (BCH) up 20%, and Bitcoin SV (BSV) up 29%. The stock market, on the other hand, did not manage to fare as well, teetering along break-even across the week, even after news of Donald Trump’s stimulus package plan was the talk of the internet.

The term “decoupling” has been exploding in popularity across crypto Twitter, in reference to the advent of the price of bitcoin finally breaking free from its correlation with the stock market. Whether or not the two have gone back to moving completely independent of one another remains to be seen, but for now, it would certain appear to be the case, pointing to a bullish case scenario for cryptocurrency markets. Certainly, some key conditions seem to be in place for bitcoin to continue its long-term upward trend; most notably 1) an increased need for a deflationary asset due to massive printing of currency fiat, and 2) the fact that the long-awaited halving event remains just around the corner.

The coronavirus has taken its toll on the health of not only individuals afflicted by it, but stock markets around the world, the economy, and of course the crypto markets as well. Hundreds of millions of people are currently under lockdown-type conditions, unable to leave their homes except to buy essential items or go to the hospital. Millions of jobs have also been suspended, with several hundred thousand cancelled altogether. Governments are hurrying to enact legislation in as wise a fashion as possible in order to minimize spread of the virus while keeping their economies afloat.

The world is in the midst of the throes of an epidemic that is unlike anything witnessed in modern history, and while things are quite serious, the resiliency of bitcoin and the crypto market has managed to shine through. In addition to the 2 mentioned above, several other elements are at play keeping the price of bitcoin at float. For one, BTC (and crypto in general) will come in handier as a means of payment while people are not transacting cash hand-to-hand. Another is that with increased indoor-time comes a higher percentage of internet users, and thus a higher interest in cryptocurrency. Indeed, several of the Bitcoin network’s core features are now working to its advantage in a time of crisis, thus helping its case to act as a legitimate store of value.

Here is a rundown of some recent news items that link together Bitcoin and the coronavirus, even if they are just tangentially related.

  • Federal Reserve cuts interest rates to near 0%. The U.S. Federal Reserve made it easier for businesses to borrow money than ever before, effectively cutting interest rates to zero in response to the coronavirus panic. In addition, they have also purchased over $700 billion in U.S. treasuries, surpassing that injected into the economy during the quantitative easing (QE) of the last recession. In some cases, interest rates actually fell below 0% for the first time in U.S. history.

  • IRS delays tax filing deadline extended from April 15 to July 15. This year, all Americans will be getting an extra 3 months to file their taxes this year for their earning in 2019, which can be used by crypto holders and traders to plan exactly how they will navigate reporting their crypto-related activities. As things currently stand, all crypto activity must be reported, which includes everything from buying a cup of coffee to exchange-to-exchange transactions.

  • Senator Kelly Loeffler accused of insider trading. A recently-elected senator from Georgia, Kelly Loeffler, reported sales of somewhere between $1,275,000 and $3,100,000 in stock in the days and weeks after a meeting between senators addressing the coronavirus. The senator is being accused of using confidential information gained while in office to avoid the brutal Wall Street sell-off that occurred this month. The relationship between Loeffler and Bitcoin is that she was at one time the CEO of the bitcoin futures exchange Bakkt. Her husband is Jeffrey Sprecher, CEO of Bakkt owners ICE, and chairman of the NYSE. Sprecher has a 1.6% share in Bakkt, giving him an estimated fortune of about $500 million.