The pandemic situation with the coronavirus sparked declines in a lot of markets, and the latest cryptocurrencies news show more losses in the price of Bitcoin (BTC), Ether (ETH), Ripple (XRP) and other tokens. However, according to the Binance CEO, the BTC price did not crash by 60% earlier this month because of the coronavirus crisis.
In a blog post that was published on March 20, the head of Binance, Changpeng Zhao (known as “CZ” in the crypto community) argued that the coronavirus showed that the world economy is too weak.
When asked if he felt that the conditions this year were different from the global financial crisis (GFC) in 2008, CZ summarized:
“In 2008, there wasn’t a pandemic pausing global economy. But I believe the Coronavirus is just a trigger, not the root cause. Our economy should be stronger, at least strong enough to survive some shocks.”
The BTC price did not crash this much because of the actual crisis with COVID-19, Zhao said. He was speaking as Bitcoin was increasingly decoupling from the misery that faced traditional markets. And while BTC was adding in value when he spoke about this, today the Bitcoin news show that there is another decline on the market.
Ever since the short recovery, the price of BTC/USD cooled and traded down around 7% in the past 24 hours. Unlike the legacy system, Bitcoin is not “broken” as Zhao claims. At some point, investors will stop hoarding cash – something that has strengthened the dollar during the coronavirus crisis.
“Have people bought more bitcoin yet? No, in most cases. Many of them are still panicking over toilet paper,” Zhao continued. “These changes take time to propagate in the economy. Changes don’t happen immediately when a mass population is involved.”
The BTC price did not crash because of the virus, according to Zhao. To him it was clear that Bitcoin will function as a safe haven in the future, given its fixed supply and the fact that it cannot be manipulated like fiat currency.
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“Don’t expect bitcoin to be guaranteed to go up when the Dow Jones index crashes, or vice versa. It’s not a perfect inverse correlation product. If you want that, you should just short the Dow Jones Index futures,” Zhao concluded.
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