Coronavirus Outbreak and Cryptocurrency Rise Are Not Causally Related Phenomena
Scroll DownA surge in both cryptocurrency values and the coronavirus cases of COVID-19 seem to be closely related. However, the correlation is not translating to causation in the eyes of some experts. Mati Greenspan, who is the founder of Quantum Economics, shared an expert opinion about the seemingly obvious connections between these events. Greenspan says that there is no direct correlation between COVID-19 cases and cryptocurrency prices.
In Greenspan's opinion, this is just an alternate coin rallying point. The stock markets are dong the same thing. People are accepting of more risks in their investments at the moment. Some investors see the COVID-19 outbreak as a catalyst for storing value. However, this cannot be the case for investors who are not in China. As of February 16, 2020, there are less than 500 cases outside of mainland China and only a handful of deaths outside of China from COVID-19.
Meanwhile, there are some reports of cryptocurrency mining facilities closing in light of the outbreak in China. However, networks are still moving as fast as ever. Any network shutdowns are not taking place at any sort of a suspicious rate. Experts estimate that about 70 percent of the Bitcoin mining pools are in China.
In watching Coindance's mining pool activity, an investor can see that the pools are running without difficulty. The mining pools in China include BTC.com, ViaBTC and Poolin. They and others are performing as expected. Reporters are also reaching out to mining authorities. Most are not commenting, but several said off the record that COVID-19 is not affecting their operations.
Greenspan went on to say that other issues are playing a bigger role in the current Bitcoin mining conditions. He added that the block reward will be halved in May, and the scarcity is likely causing the increase in the coin's pricing now. Instability in the Middle East could also be causing Bitcoin and other cryptocurrency rallies. Greenspan also added that central bank financial policies are playing a role in the cryptocurrency value growth. He added that the possibility of hyperinflation, such as in Venezuela and Zimbabwe, is unlikely.
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