The Coronavirus pandemic has had (and is having) a devastating impact on financial markets and the economy of almost every part of the world. What was the trend of Bitcoin during the critical phase of the Coronavirus pandemic?
Today we analyze the behavior of Bitcoin during the quarantine period.
Bitcoin vs Coronavirus: the initial drop
In the first days of March 2020 Bitcoin reacted as the stock market, that is losing a lot of ground going down from 9,134 dollars (6 March) to a minimum point at 3,888 dollars (13 March).
The first result of the Coronavirus pandemic was therefore a real collapse in the price of Bitcoin, which however was not destined to last. In fact, not many expected it, but Bitcoin then rallied upwards.
The first collapse aroused some concern because it could have been a test case for the main cryptocurrency and was initially appearing as a poor financial asset.
In reality Bitcoin has behaved just like the stock market, fear has taken over and many BTC owners decided to sell and monetize.
The cryptocurrency below $ 4,000, however, was too tempting an opportunity for many investors, as we will see.
Bitcoin recovery during the Covid-19 pandemic
Since March 13, 2020, the lowest point, Bitcoin has experienced days between $ 4,000 and $ 6,000, then started a growing trend on March 18, even before the pandemic peak.
Throughout the month of April 2020 Bitcoin experienced a great recovery reaching first $ 7,000 and finally on April 30 returning to 9,000, substantially closing the gap.
Bitcoin was therefore far from dead, it was considered a winning asset by many investors from all over the world.
The appeal of Bitcoin has led him not only to recover the gap, but to have a not inconsiderable subsequent result, namely the little volatility and solidity.
In the months of May, June and July the price of Bitcoin fluctuated from $ 8,000 to $ 10,000, remaining around $ 9,000. In recent months Bitcoin has shown that it maintains its own price area.
It is not a negative result, but it is perhaps the awareness that it is not only a speculative asset, but an increasingly sought-after form of investment.
Why has Bitcoin endured the Coronavirus pandemic?
The reasons for this positive result can be different, but we try broadly we can give three.
Bitcoin faced the third halving of its history in May 2020. Both the preparation for this event and the consequence of the same may have pushed the price of the cryptocurrency to grow or otherwise remain high. Indeed halving has led to reduced rewards for miners and more limited new bitcoin creation.
As anticipated, the stock market initially collapsed, but unlike Bitcoin, not all stocks recovered lost ground. In fact, many companies have suffered from the lockdown and pandemic and may not recover, in any case, not in a short time. Bitcoin may have drawn strength from the weakness of other financial assets, rising to a more solid asset.
Finally we could say that Bitcoin has reached its size in this period in this price range, therefore physiologically a quote under $ 4,000, reached at the beginning of the Coronavirus pandemic, naturally led investors to buy this asset considered at the time underestimated.
In short, Bitcoin performed well, making those who believed in it (and who could afford to spend money) gain something during the lockdown period.
What do you think about it? Bitcoin is set to rise?
I invite you to read this article: "Taken a record amount of BTC from exchanges" in which it is clear that a strong bullish phase is likely to arrive for BTC.
If you have come this far, thank you very much for reading, see you next time!
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