Coronavirus Causes Bank Branches to Close in Asia But Could it Help Cryptocurrencies? Jonathan Ganor 2020-02-05 11:56:51 521 views

Could the Epidemic Trigger a Recession and Will Safe Haven Assets Thrive?

The Wuhan Coronavirus has been spreading at an alarming rate. It has managed to infect nearly 25,000 individuals within roughly 2 weeks, with roughly 500 deaths attributed to the virus. While the vast majority of the cases have been reported within mainland China and specifically the province of Hubei. Only 175 cases of the virus have been reported outside of Mainland China with one death reported in the Philippines.

Coronavirus, Bitcoin & the Economy

The economic effects of the virus can be seen globally, however. Many factories have been closed in a nation well known for its manufacturing sector. Schools in both China and Hong Kong have been put on extensive leave until February. Last but not least many bank branches have closed or will close due to the virus. It has been reported by the South China Morning Post that 30% of all bank branches in the financial hub of Hong Kong are closed. It is unknown how many bank branches remain open in China's mainland.

The closure of bank branches could create major financial issues for citizens leaving some unable to access their finances. Situations such as these create a strong use case for cryptocurrencies and Bitcoin.

It seems that the Wuhan Coronavirus could potentially cause a slowdown in the global economy if it continues to progress. The Chinese stock markets have been reporting losses. Shanghai's SSE composite Index reported losses since it reopened last week after being closed due the Chinese New Year.

Some, including the founder of Fundstrat, Tom Lee have speculated that the coronavirus could be a factor in the rise of cryptocurrencies and Bitcoin. He recently shared his opinion on a segment of Yahoo Finance.

Highlight: “We’re really optimistic on crypto and bitcoin this year,” @fundstrat’s Global Advisors Managing Partner & Head of Research Tom Lee says. “Whenever bitcoin breaks back into its 200 day, its average six-month gain is 197%.” pic.twitter.com/2tqzsuOV0m — Yahoo Finance (@YahooFinance) February 4, 2020

Additionally, Reuters have reported that the Coronavirus could affect the FX market negatively. As such many might be looking for safe haven assets such as gold and cryptocurrencies. This could hypothetically push both Bitcoin & gold to higher highs in 2020. It could also be a factor in the recent market movements we've seen recently.

One thing is certain for now, this is not the last we'll hear about this health crisis in 2020.

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