For the Bitcoin world, the two poles are not in the north and the south; they are in the east and the west.
China and the United States of America – the two superpowers in the global economic world are also at the center of every Bitcoin price swing. Recent cases show plenty of examples.
The boom-and-bust in 2017 and 2018 were invariably centered in the United States. With regulated exchanges like the CME and CBOE green-lighting BTC Futures contracts, a massive impetus was given to the world’s largest cryptocurrency, taking it close to $20,000 a pop. The following year, as the SEC wised up to the ICO scams running amok, a tokenization clampdown ensued and soon, the price tumbled.
During the close of 2019, China played the Bitcoin market like a flute. With Xi Jinping announcing the Chinese embrace of blockchain technology, Bitcoin surged, and then went through a series of price fluctuations as China refined its statement to highlight its ‘Blockchain, not Bitcoin’ credentials.
Yet again, Bitcoin is locked in a heated price battle, trudging above and below the $10,000 mark, again with China and the United States at odds.
The Corononavirus [Convid-19] outbreak which has claimed over 1,800 lives over the past two months has brought markets to a standstill. Surprisingly, while global indices have taken brutal hits, Bitcoin has been moving up.
Since the beginning of the year, Bitcoin is up by over 40 percent. Further, as January came to a close, overseas cases of Convid-10 began piling up and Bitcoin saw a stark boost, surging past $10,000 for the first time in over 3 months.
With Bitcoin playing safe-haven earlier in the year when the U.S took out Iranian military commander Qasam Soleimani, another global hedge claim was made, this time on an epidemiological note. While China’s push-and-pull with the Bitcoin markets is evident, this bullish movement might have less to do with China and more to do with the United States.
Cryptocurrencies as a whole, let alone the isolated Bitcoin, is not affected by Convid-19, claimed an unequivocal Mati Greenspan, founder of Quantum Economics in his letter to investors. The “narrative” of a safe-haven buy is too weak to cause market movements, he said, adding,
“As far as I see, Coronavirus has yet to have any impact on bitcoin’s price whatsoever. The few speculators who might be buying on the narrative that BTC somehow is a safety play in the face of a global pandemic are probably not powerful enough to move the market.”
What then? How well is China impacting Bitcoin?
A digital impetus is present with China cleaning [quite literally] cash. However, this digital claim does not boost the decentralized currency. The urban society of China has been largely cashless for years and mobile payments are predominant; hence, a Bitcoin gain is overstated.
What can have an effect on Bitcoin’s price is the United States, specifically imminent regulations the country passes. A start was made by Steven Mnuchin, Secretary of the U.S Treasury Department, recently after last week he stated that his department is “spending a lot of time on this [crypto-regulations].” He added,
“We want to make sure that technology moves forward but, on the other hand, we want to make sure that cryptocurrencies aren’t used for the equivalent of old Swiss secret number bank accounts.”
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Regulations, hence, will paint a more significant picture of the price of the cryptocurrency in 2020, more than any safe-haven claims. If anything were to quarantine Bitcoin’s price, it would be American regulations, not a Chinese epidemic.