The coronavirus is impacting manufacturing and hashrate growth of Bitcoin in china. The long-term outlook is ambiguous as fiat responses may stimulate bull-run or lead to a deeper reduction in hashrate and market price.

Quick take:

Bitcoin prices and mining power are ceasing to rise as Coronavirus impacts global markets

Production of mining equipment is facing delays, stalling mining growth

Federal actions on fiat currency may stimulate higher BTC price

Coronavirus impacting Bitcoin prices and hashpower

As the coronavirus has spread to over 62 countries, world markets are beginning to draw back significantly from one of the largest bull runs in economic history. The Dow Jones, S&P 500, and NASDAQ all dropped more than 11% in the past week (as of close of markets 02/28), the largest drop since the financial crisis of 2008. This dramatic volatility is impacting Bitcoin mining and market price.

Some believe that Bitcoin prices hedges against market instability, but the price of BTC over the past month has paralleled the stock market pullback, dropping in price over 10%. On February 23rd, BTC was evaluated at just over 10,000. As of the time of this article, the market evaluation is under $8,700. As this price fluctuates significantly, miners are slowing down in ramping up hashpower in anticipation of the upcoming halving.



Bitcoin started the year with strong gains. In February, the hashrate of BTC has fluctuated dramatically from a peak of 125 EH/s to 96 EH/s. The network saw drops and surges of 23% in under 24 hours.

Limitations in manufacturing abilities of China are partially responsible for the mining power slow down. Major manufacturers are unable to meet demand for new mining equipment due to quarantines in China. Major ASICs manufacturers MicroBT, Bitmain and Innosilicon reported that deliveries of their products would have at least a week delay due to the extension of the chinese New Year holiday to February 10th.

2020 impacts in China

If the virus continues to spread, the mining community in China may face difficulties growing. Many miners move to the southern region of China (Sichuan province) for the excess electricity generated by melted ice flows from the Himalayas. Continued quarantines in China in the coming months will significantly impact BTC’s hashrate.

Poolin is not expecting the current situation with coronavirus to remain.

“We have seen the bitcoin mining difficulty steadily decline after the virus hit China. We expect, however, that the situation will normalize in around two months time”. – Alejandro de la Torre, VP, Poolin

BTC not hedge against stock market

The impacts of recent market instability shows that BTC is not necessarily a hedge against the stock market instability. The market value of BTC is speculative and volatile. Investors looking for a safer bet against market instability are not necessarily looking to add risk to their portfolio by purchasing BTC.

The key value proposition of Bitcoin and other leading cryptocurrencies is to hedge against fiat inflation. The price of cryptocurrencies may not fare well with market instability. Fiat actions that stimulate currency inflation in reaction to a market decline would likely cause a strong bull reaction. For example, If the Federal Reserve were to employ quantitative easing (QE) methods in attempt to qualm market instability, this would strengthen the value proposition of BTC and other cryptocurrencies as deflationary and would then stimulate a rise in the hashrate and market price.

Quantitative easing is a tactic of federal authorities to increase cash flow in the country. Authorities purchase mortgage backed securities and treasuries from partner banks, giving them a fresh supply of liquidity. The last employment of a QE method for US Federal reserve was in 2008 in response to the financial crisis. This moment was arguably the source behind the birth and rise of Bitcoin.

Regardless of Federal reactions to the markets, BTC will likely maintain volatile in price and hashrate for the coming months. The upcoming reward halving and global instability during Q2 will determine crypto’s future.

Written by Nate Christenson

hashPoWah editor, eCommer Program Manager