The period post coronavirus crash has been one of disbelief, showing a disconnect between market sentiments and price action.
Reportedly, the flow of investment into bonds reflect a positive attitude towards China and Europe. Whereas in the US, the investors are still apprehensive.
In the US and even in India, though, the large number of daily cases is still a major concern. Thomas Lee, financial analyst and partner at Funstrat tweeted,
even as daily case surge is peaking, it will take some time for daily deaths to peak.
As the uncertainty around stocks and with it Bitcoin continues to grow, prominent trader, Tyler D. Coates, notes on the impact of the virus on the investors. He told us in an e-mail comment,
we are already seeing the indirect impacts of money printing flowing into BTC and gold.
Presently, the cure for the disease is under-development and people around the world are anxious for a vaccine. The only solution that remains with the people right now is social distancing and hoping to increase one’s immunity.
However, despite rampant reports of trials and success by some pharmaceutical companies, the likelihood of a vaccine by the end of 2020 is highly doubtful. Jay Hao, the CEO of Okex told us,
I think the coronavirus is not going away any time soon. A lot of evidence shows that the virus is constantly mutating, and we are already seeing the so-called COVID-20. Therefore, I don’t think the vaccine will work to its fullest potential — and also, due to the fact that only a few trials have been conducted, the impact of potential side effects is not known yet. Having said that, I personally don’t see that the vaccine will affect the Bitcoin markets very much at the moment.
The liquidity from the quantitative easing measures is causing a devaluation of the US Dollar and a flight towards riskier investments. Moreover, while the markets have apparently failed to factor in the negative impact of the rising number of cases, investors are now attempting to factor in the slowdown by moving towards bonds, gold and Bitcoin.
Charles Edwards, on-chain analyst and founder of Capriole.io told us,
In all, I don’t think it (vaccine) will have an impact once it is available, as the markets will have priced it in already. The biggest impact will be when there is an official announcement of a date when the vacinne can be rolled out by, and the impact on markers will depend on the quantity of vaccines which can be deployed. However all in all, the market is probably already pricing in a vaccine for 2021 or 2022.
Bitcoin [BTC] is forging new yearly highs, and crypto markets are over-all bullish which makes it a perfect setting for proving itself as an uncorrelated asset.
Do you think that we’re likely to see worse crashes in the future? Please share your views with us.