BTC Does React to International Tensions and Social Problems. (Coronavirus)

in LeoFinance •  last year 

The main manufacturers of cryptocurrency mining devices including MicroBT, Bitmain and Canaan, have informed their customers that they will be delayed in deliveries of mining application-specific integrated circuits (ASICs) because The Chinese government has decided to extend the Lunar New Year holidays caused by the spread of coronavirus in China.

Precisely with the entry of the "Year of the Rat" the presence of the lethal virus is also announced.

This combination has created an effect on the capitalization of bitcoin never seen before. With the new year it is not surprising that Chinese traders move away from cryptocurrencies for a few days, which causes a market downturn due to lower prices and lower volumes.

The first quarter of each year is a particularly bad period for BTC.

In the opinion of several experts this is influenced by the Chinese festivities. We must not forget that the Red Giant is still the nation with the highest mining index in the world, despite strict capital controls and government regulations in rejection of crypto trade.


Chinese Surprise

According to Forbes reports of January 27, 2020, Bitcoin experienced a 5% increase, briefly rising to $ 9,142.80.

Bitcoin is not the only crypto that experienced a boost this week. Other assets also recorded acceleration.

It is speculated that the price of Bitcoin is growing due to the spread of the coronavirus, which shows that BTC really reacts to international tensions and social problems.

If we consider that the central bank of China, following the principles of the Modern Monetary Theory (MMT) has injected 1.2 trillion yuan ($ 173 billion) into the economy, we could assume that this would be reflected in an imminent devaluation of the local currency, which could perhaps be a determining factor that has prompted citizens to use BTC as a refuge for their capital.

Another factor to consider is the fact that motivated to spread the virus, many migrations can occur anywhere in the world. Especially from China, despite strict quarantine measures.
Then it would be very practical for someone who decides to emigrate, have a universal and solid currency that will not lose value, interchangeable anywhere in the world.

For all these reasons it is very likely that we will see a considerable increase in the price of BTC in the coming weeks.


@juanmolina


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Dear @juanmolina

Interesting choice of topic.

This combination has created an effect on the capitalization of bitcoin never seen before.

What means 'capitalization' in this context? Hope it isn't silly question - I just never used this word before.

In recent years Lunar New Year meant that Chinese investors will be selling out their positions. It indeed repeated itself every year, however I wouldn't expect Chinese market to have much impact on crypto those days. Most Chinese investors are not in crypto any more - since it has been constantly targetted by their own authorities for very long time already.

That's anyway my own little impression.

We must not forget that the Red Giant is still the nation with the highest mining index in the world

Oh, I did not know that. So they have tons of miners? Still?

Solid read, upvoted already
Cheers,Piotr


@tipu curate

Hi dear Piotr.

Oh, I did not know that. So they have tons of miners? Still?

Right!
There are millions of miners in China. There are also many Chinese investors who have established their bases of operations in Hong Kong as a way to avoid restrictions.
The government itself knows that crypto activity is active in China but avoids talking about it. It is like a great open secret.

Capitalization: I refer to the way in which the number of operations has increased, which has a direct impact on a price increase.

Upvoted 👌 (Mana: 5/20 - need recharge?)

I have seen periods when Bitcoin seemed to follow other markets, and periods when it was moving in the contrarian direction (had negative correlation). I think it reacts more to crypto-related news. And maybe larger Chinese capital market changes.

I´m not expert about Bitcoin changes.
I just read an analysis of Timothy Peterson, he studied the behavior of BTC during his 11 years where he observed that behavior in all Q1 and was able to establish a relationship with the Chinese New Year .

Could be?

With the BTC everything is possible. And it's not crazy to think that the coronavirus affects it too.