The Center for Diseases Control and Prevention issued a warning letter calling the citizens to be prepared to take “disruptive measures” in face of the deadly virus. This threatens imposition of laws like school dismissals, social distancing, and so on.
Consequently, the stock markets plunged over 7.8% with a huge gap at market open. Moreover, the scare was so potent that gold also dipped by 3.7% from its high yesterday.
The positive correlation of Bitcoin with gold ended it’s year long spree, as the Gold and Bitcoin seems to be going in opposite directions.
Gold Prices continues to sky-rocket with the Coronavirus scare. The virus has spread across most of Europe. Moreover, the health officials in the US, yesterday warned the citizens of a possible outbreak in the country.
The US and many other countries have limited their imports from China which, in fact, is one of the leading exporters of the global economy. Mati Greenspan, a financial and crypto analyst tweeted on the consequence of the decreasing imports,
Supply shock coming to a store near you. Watch out for rising prices.
Since the beginning of this week, the Japanese Dollar has gained 2% over the US Dollar. Media reports of the virus spreading across the country could possible dip prices, as it did with the Chinese Yuan. Moreover, if the price of necessities continue to rise, the demand for FIAT will increase as well.
Digital Gold? Not Yet
Bitcoin is primarily a risk asset with a huge projected upside due to rising adoption. However, in terms of safe haven during tumultuous times, FIAT and Gold is still king. The rush to FIAT and commodities market will act as insurance against further downtrend in productivity.
Charles Edwards, a crypto analyst from Capriole Digital Assets Management firm tweeted,
In yesterday’s market termoil, we found that Bitcoin is still not “Digital Gold”
… yet. pic.twitter.com/Ww2ABhBLCP
— Charles Edwards (@caprioleio) February 25, 2020
The real world adoption of Bitcoin is unarguably below 5%, at the moment. Hence, it is acting more like a digital risk asset, than a safe haven.
Furthermore, if economic activities come to a stop due to further spreading of the virus, most asset classes are expected to blow.
How do you plan to prepare for a global outbreak? Please share your views with us.
Disclaimer
The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
Source: https://coingape.com/bitcoin-losing-its-ground-as-a-digital-gold/
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