The supporters of Bitcoin and other cryptocurrencies have always insisted
that one of their main advantages is that they are a safe haven in times of
crisis. Unfortunately, the coronavirus provided an opportunity to test this
The disease is rapidly spreading across the globe, and it instantly hit
stocks, commodities, and every other tradable asset you could imagine. We’re in
the middle of the biggest recession in more than a decade.
In theory, this creates the perfect environment for Bitcoin and the other
currencies to shine. In practice, it’s exactly the opposite.
In this post, I take a look at how the coronavirus crisis proves Bitcoin is
not a safe haven and provide my predictions on the short- and long-term effects
of the coronavirus on BTC and the other popular cryptocurrencies like Ethereum
Bitcoin and Other Assets’ Price Movement Since the Start of 2020
Before I move on to the analysis and predictions for the future of BTC and
the impact of the coronavirus, let’s look at some facts. Bitcoin started the
year around the $8,000 mark and quickly started rising the following weeks and
In the middle of February, the price was over $10,000, and the same trend
happened with other popular currencies. Ethereum was over $280 for a brief
moment in time, Ripple was over $0.30…you get the picture.
The prices pretty much stayed around the same mark for a while, and then a
slight drop happened at the end of February. Bitcoin went back to under $10,000,
and the rest of the cryptocurrencies followed.
At this point, this looked more like a healthy correction for the spike since
the start of 2020. Some people probably hit their targets for buy positions and
closed them after $10,000, the selling volume became lower, the usual stuff.
There was a drop to $9,000 followed by a similar movement in the other
digital assets, and this is where we started March. At this point, the
coronavirus started spreading outside of China and reached Europe. The disease
quickly became a worldwide phenomenon and started causing all sorts of damage.
Flights were held, people were quarantined, sporting and cultural events were
postponed, and the world slowly started fighting the virus.
Many of the measures were expensive, and the economies of many countries were
hit heavily. As a result, we saw the price of the stock market crash.
Dow Jones reached its lowest
level for more than a decade, and it was the worst day on Wall Street since
1987. All traditional assets have been in a freefall since the start of the
The only exception is gold, which initially jumped but has since returned to
pretty much the same levels as the beginning of March.
In theory, that was the ideal situation for Bitcoin and the other
cryptocurrencies to shine and skyrocket. Instead, BTC entered a freefall, and
the price of the currency touched $4,000 yesterday. While there was a correction
and Bitcoin is now over $5,000 once again at the time I’m writing this, it was a
stunning hit to the credentials of cryptocurrencies as a whole.
The likes of Ethereum, Ripple, Bitcoin Cash, and Litecoin all followed a
similar pattern and are nowadays worth half compared to their peak in February.
This begs the questions of why and what happens next.
The Coronavirus Proves That Bitcoin Is Not a Safe Haven
I’ve been interested in the crypto world for almost a decade now, and while I
wouldn’t call myself an early adopter, I have been following the sector for
longer than most people. I always believed in the core fundamentals of the
concept, and I still do to this day.
And yet, I’ve always struggled to understand the logic of the people who
insisted that Bitcoin was
a safe haven
for two reasons.
The first one is that we never saw any proof of that, and the arrival of
coronavirus actually is the first huge global crisis in the history of Bitcoin.
The cryptocurrency is failing spectacularly at the moment, and this leads me to
the second reason why I never liked the “safe haven” label.
The overall nature of Bitcoin simply does not bode well in times of crisis.
The path of the cryptocurrency so far has been filled with volatility, liquidity
issues, hacks, price manipulations, and other factors that make it a risky
The truth is that BTC is still a high risk, high reward type of asset. It is
often driven by the hype and the perception of the mass users. Sure, there are
whales and financial institutions playing with the price, fundamentals that keep
it valuable to an extent, and other factors.
But the reality is that Bitcoin is too volatile to provide security when the
world is burning. There is simply no reason to believe that, and we’ve seen the
results clearly. As soon as there was a slight drop, the panic simply sunk the
On top of that, I think that many investors may be closing their Bitcoin
positions to gain liquidity. They need it to cover their margins on other assets
or simply to prepare for other investments. Cash is king right now as it allows
you to carefully look for new opportunities.
The Short- and Long-Term Impact of the Coronavirus on Bitcoin
Bitcoin’s price currently stands at $5,400 or so after correcting yesterday’s
insane drops. The big question is what happens next. In the short term, I see no
way for the cryptocurrency markets to recover to the levels before the
I mean, we could see $6,000-$6,500 in the next couple of weeks, but that’s
it. I don’t see where a push could come from, so Bitcoin will either keep
falling down or stay at pretty much the same level.
That’s why I recommend you to take advantage of an interesting betting market
offered by BetOnline.
The bookmaker offers the following wager.
Price of Bitcoin by March 15th, 2020
I believe that Bitcoin either won’t be able to recover to $6,000, or at least
it won’t stay above that mark until Sunday. That’s why backing the under is a
good option here.
As for the long-term future of Bitcoin and cryptocurrencies, I wouldn’t dare
to make any definitive predictions. The coronavirus crisis has just started, and
we have no idea when it will end. Until there is light at the end of the tunnel,
it’s hard to say what will happen.
My gut feeling is that the crypto will keep dropping slowly, but it will
eventually recover a big chunk of the losses once the disease is no longer part
of our daily lives.
If you are looking for a piece of investment advice from me, I would say it’s
probably best to stand still and observe the Bitcoin price and the other digital
assets. This is a unique situation the crypto world hasn’t seen so far, and it’s
hard to predict what’s going to happen.
Keep a cool head and don’t make any big moves before you have good reason to
believe that there will be some consistency in the near future.
Jerry Summer has a wide-ranging interest in gambling and the gambling industry. He's made a living out of both playing poker and betting on sports.
The English Premier League and the NBA are among Jerry's primary areas of expertise. He's knowledgeable about many other sports, too, along with poker and several casino games.