Coronavirus — is it Good or Bad for Bitcoin?

Price of Bitcoin may be rising due to ”economic fear” over coronavirus — but only up to a certain point, analysts state as the disease proliferates.

On January 28, Bitcoin stepped over $9,000, capping 4% gains for the week in which China had to enter partial lockdown because of coronavirus.

Uncertainty about coronavirus surfaces on the market

Fears about implications for Chinese economic growth are slowly creeping into the markets, and some signals worldwide indicate that investors are more cautious about the short term.

Analyst Mati Greenspan already senses the sentiment. Sharing a chart of United States bond yields, he stated that returns from one-month performance were higher than the longer seven-year options.

“It means investors are expecting trouble in the short term,” he commented.

Economic uncertainty and unrest alike has often prompted increased bullish action for Bitcoin. Earlier, the Iran crisis was one of geopolitical events which pushed BTC prices higher.

Greenspan noted that Bitcoin is a non-correlated asset, which echoed with the viewpoints shared in media, which argue that Bitcoin does not comply with the rules which guide the traditional markets, and that gains on coronavirus rise are impossible.

A report by the Financial Times titled “Coronavirus is good for Bitcoin” was particularly criticized. Interestingly, the report cited two unknown Twitter accounts dedicated to altcoin XRP as sources.

Earlier CryptoTheNews shared a report, Bitcoin has long showed robust technical foundation, which preceded recent price shifts.

Vays: virus may be harmful for Bitcoin in epidemic scenario

Speaking on possible influence of coronavirus, trader Tone Vays nevertheless expressed disagreement with the idea that the disease could give momentum to further gains.

If it were to spread globally, for instance, scared investors would likely lower speculative activity, which means that interest in non-traditional assets like Bitcoin, will fall.

On the latest episode of his Trading Bitcoin series on YouTube, Vays said:

“The coronavirus does bring some economic fear, so the fear that the coronavirus could start to spread is certainly helping the rise of Bitcoin versus hurting the rise of Bitcoin.”

Vays also stated that Bitcoin would have to stay above $9,000 for several days to secure its bullish trend.

In the meantime, Google Trends seems to underscore the lack of correlation between coronavirus and Bitcoin, indicating, that the search interest in the latter was quite flat throughout the past month.