As the world is attacked by COVID-19, cryptocurrency is also in a peril.
The price of Bitcoin fell down by a half before corona virus outbreak. After that, it is recovering gradually. But the prospect is still uncertain.
Bloomberg: While coronavirus rages, bitcoin has made a leap towards the mainstream
Previously, Bitcoin was identified as a safe haven because it was independent from any governments or authorities. However, referring recent situations, the price is following the basal currencies.
In my sense, the idea that cryptocurrencies are invulnerable to financial crises is an illusion. Actually, the price of Bitcoin is determined by marketers absolutely. Any official forces cannot create new coins, different from fiats.
However, there are some factors to influence the price of cryptocurrencies outside from its mining process.
For example, when the energy cost is increased by oil shock, many miner will have to give up their work. It leads to downgraded reputation of Bitcoin.
Also, business confidence affects the price of Bitcoin, in my sense. In the boom, many investors are willing to buy Bitcoins. In a depressive state, they would not. Their feeling is somehow influential to the price itself.
In my opinion, recent breakdown of Bitcoin price was reflected with wide-spread pessimism of the market. I do not believe someone would by Bitcoin for safety now.
Therefore, the price of cryptocurrencies will be fracturing for a while, as COVID-19 pandemic will not be terminated soon.
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