Coronavirus influence on bitcoin
I’m sure everyone has heard about the coronavirus. It literally went viral and influenced every part of our lives. The crypto market was not an exception when the whole world is shaking and everything is unstable.
Beginning of crisis
As the pandemic has begun, stock markets started behaving strangely. Just think about recent events with oil price – contracts for oil were below $0 so if you would buy one, they would pay you for that! It is just oil but if you look at other assets like resources or companies shares – some of them dropped really hard too. Do you know what happens when your papers lose their worth? Brokers, people who trade them, ask you to put more money in the market so it does not collapse. They call it „margin call” as it happens when you get close to the margin brokers do not want to cross. So when coronavirus shook traditional markets – there were lots of those calls. If you have some money you saved before it’s great, you’re safe. But when you don’t have enough funds on your bank account you need to sell something, right? So, what would you sell? I don’t know but I know that many people started selling cryptocurrencies. Massive transaction spike, destabilization of bitcoin – that’s what happened recently.
What about miners?
However, the Bitcoin price wasn’t affected only directly. Since whole continents are locked down, many production centers are not working, many miners struggle to get the hardware they need. Unfortunately, not only supply chains are broken. There is even a problem with getting second-hand equipment. Because of that the cost and difficulty of maintaining, renewing, and continuing production of mining machines have further increased.
What is going to happen next? Will investors move towards bitcoin and other virtual currencies? Will miners deal with difficulties? We’re going to see that in the near future.