Today, March 11, at a briefing by the World Health Organization, director Tedros Adan Gebreisus said the coronavirus epidemic had become pandemic. Against this background, it is expected that the production and GDP of all countries will decrease, and therefore assets will fall. Exante analyst Viktor Argonov figured out whether cryptocurrencies could become a defensive asset in the face of a falling global market.
Bitcoin, as a rule, always moves after the main financial indexes, therefore, it is perceived by investors as a high-risk asset, in addition, with high volatility. In the face of a falling market, such assets are disposed of primarily in order to preserve their capital.
But, at the same time, cryptocurrencies are able to maintain functionality during problems with traditional payment systems, or in conditions of bank quarantine.
In early February, there was a real threat to the stability of payment services in China. Now the situation inside the country has stabilized, but the disease has spread to the whole world and continues to increase its pace. While the number of patients and deaths in each country is ten times smaller than in China, investors do not expect global financial disasters and do not consider cryptocurrencies as an alternative.
Victor Argonov believes that the fall of the cryptocurrency market over the past few days was not provoked by the epidemic itself, but by the reaction of other markets to it, which crypto always reaches for. If the spread of the disease declines, the main assets will begin to regain their positions, pushing cryptocurrencies up. If the numbers of sick and deceased in many countries reach the level of Chinese, the protective potential of cryptocurrencies can fully manifest.
If at the moment the price of bitcoin follows the trend of global financial markets, there are other cryptocurrencies that, despite everything, have shown green dynamics over the past two months. Among them:
- Tezos (XTZ): + 101%. It is considered the most decentralized PoS token for exchange stacking and has been used since 2019.
- Chainlink (LINK): + 87%. Sidechain to ensure the operation of smart contracts, third-party projects like ETH or the same XTZ.
- Ethereum Classic (ETC): + 55%. 2016 Ethereum Fork, which remains on the PoW protocol and is actively mined by GPU.
Other coins that Viktor Argonov notes:
- Bitcoin SV (BSV): + 32%
- Huobi Token (HT): + 30%
- Crypto.com Coin (CRO): + 24%
- Dash (DASH): + 36%
- NEM (XEM): + 41%
- ZCash (ZEC): + 21%
Image source: https://24tv.ua/