Coronavirus has plagued China for weeks now, and even before its outbreak, Bitcoin was the leading indicator that things could be headed for the worse. Also, the outbreak has led to high demand for the leading cryptocurrency by the Chinese, which has spiked its price significantly, according to Forbes’ report on January 27, 2020.
Bitcoin’s Role as a Leading Indicator for Coronavirus Outbreak
Per the report, Bitcoin is the leading indicator of the coronavirus outbreak in China. The latter was tied to the fact that the crypto-asset spiked in early December 2019, when coronavirus was first discovered in Wuhan City, Hubei Province of China. However, its spike waned by late December, which was a sign that things were cooling off. But at the start of the year, Bitcoin made parabolic moves even before the news about the high death toll in China began to circulate.
Furthermore, China is a significant driver of the asset and its most recent spike in price. Reportedly, the wealthy and highly placed in the society are often the ones to get hands-on the first piece of information. As such, even before the news about coronavirus reached the average person, the wealthy would’ve amassed Bitcoin and transported their loved ones out of the country.
Consequently, this high demand in China within a short period has impacted positively on the virtual asset’s price. Bitcoin, the asset in question is now priced around $9,400. The digital asset spiked by 9% within 48 hours, and 30.65% since the start of the year.
Bitcoin as a Safe Haven Asset in Economic, Political, and Health Crisis
Time and again, it has been said that the leading cryptocurrency is a safe haven asset against economic and political crises. Its spike was evident in the U.S.-China trade war, and the U.S.-Iran war. And now, it has also become a valuable asset in the times of epidemic. Compared to fiat or gold, it is easier to fly abroad with a digital asset.
In China, for instance, where there are limits to how much a person can travel with, out of the country, falling back on Bitcoin takes away this limitation. Much more, all a person needs is a Bitcoin wallet and their private key and they’ll be able to access a range of cryptocurrencies and fiats irrespective of their location.
Coronavirus, on the other hand, has infected over 4,500 people in China, leaving over 106 dead as of January 29, 2020. The virus which causes respiratory illness has spread to countries including the US, France, Australia, and Germany. The World Health Organization (WHO) while making comments, said the virus is an emergency in China, however, it is still not the time to categorize it as an international emergency.