Bitcoin “Escapes” Coronavirus Selloff, Rises Over Four Percent to US$9,000

RIO DE JANEIRO, BRAZIL – While global markets experienced a “selloff” day over fears of the advance of the Chinese coronavirus, crypto-assets are increasingly proving to be an alternative for investors at these times, and rose sharply on Monday, January 27th.

Around 6 PM (Brasília time), the Bitcoin recorded a rise of 4.47 percent, quoted at US$8,964 – in Brazil, the rise was 4.98 percent, at R$37,668 -, while the IBOVESPA dropped 3.30 percent, at 114,500 points and the Dow Jones fell 1.44 percent to 28,578 points.

By comparison, gold, one of the world’s safest assets, rose by 0.58 percent to US$1,581, reinforcing the search for protection by investors around the world.

The large increase in recorded cases of coronavirus around the world over the weekend has triggered a panic scenario in the markets as investors fear the economic impacts that this health crisis could cause.

If the virus becomes a pandemic, two of the most affected sectors would be tourism and trade, not only in China, which is the second-largest economy in the world but also in other countries, which could hinder global economic growth.

“The low correlation with the other financial assets, together with the fear of the coronavirus’s unfolding, has pushed up the price of the Bitcoin,” explains Safiri Felix, an expert in crypto-electronics and director of the Brazilian Cryptoeconomics Association (ABCripto).

“The demand from the Chinese for Bitcoin as a protection asset has been evidenced in the past and tends to intensify in the event of a worsening panic,” he says, recalling other scenarios in which cryptocurrencies have risen amid tensions, such as the US-China trade war or the Argentine crisis.

Ten days ago, during the panel on crypto-assets of ‘Where to Invest 2020’, Safiri highlighted three factors that could help the Bitcoin to rise this year, even after doubling in value last year, and among them is exactly its use as “digital gold,” that is, the fact that it is used as a protective asset in times of tension.

Completing the positive outlook for the digital currency, he further mentioned ‘halving’ (halving the supply of new Bitcoins), expected for May, and also what he termed “financialization of the Bitcoin”, that is, the emergence of new financial products that use the Bitcoin as ballast.

Along with the Bitcoin, virtually all major cryptocurrencies are also rising strongly. These are mainly Bitcoin Cash, with gains of 7 percent, and Bitcoin SV, which is rising 12 percent. The EOS is up nine percent, while the Cardano rises eight percent.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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