These days the situation caused by Coronavirus is increasingly worrying, in addition to stocks, bonds and Etf even Bitcoin has its part in my site. Taking an overview of this cryptocurrency, I would start from Tuesday 24 March when the price has risen despite the strong fluctuations in the stock market in recent weeks.
I noticed a 10% increase in Bitcoin compared to Monday 23 March, trades reached 6570 dollars, other cryptocurrencies such as Xrp and Ethereum recorded increases (5/ 7%) reaching a capitalization of almost 183 billion dollars (general overview of cryptocurrencies).
What makes Bitcoin special?
1) Inventor Satoshi Nakamoto has determined that the number of Bitcoins is limited, so if an asset is scarce, it is likely that one day prices will be very high.
2) World governments are printing large amounts of money (see Federal Reserves and European Central Bank) to support the economy, you will tell me is the best solution to stem the Coronavirus. I answer with 3 arguments: price increase – effect of the increase in the currency in circulation , increase in public debt , VAT, property taxes etc…, devaluation of the currency – loss of purchasing power for goods and services (people’s lives are priceless…Health First!!!)
In recent years Bitcoin has been compared to gold because it is seen by many people as a safe haven asset to invest in, when financial markets are under pressure and signs of recovery are further away. Some analysts think that Bitcoin and in general cryptocurrencies are too volatile and unsafe (complex algorithms, hacker attacks), just see the heavy correction of recent weeks, objectively the downturn in financial markets has been recorded worldwide given the increase in coronavirus infections.
My advice for investors is to wait for the evolution of the pandemic without panicking while for those who do not know the world of cryptocurrencies, I recommend studying some books to begin to understand how these digital coins work.
Updates on cryptocurrencies will follow.
