The global economy keeps under pressure amid the fast-spreading coronavirus infection. The number of infected has exceeded 28 thousand, the global death toll is 564. Despite all the efforts of the Chinese authorities, the virus hasn’t been localized yet. The epidemic continues.
In attempt to curb the coronavirus outbreak, officials in the Chinese city of Macau decided to close their casinos for 15 days. The decision to shut down the casinos effective from February 5 was a new blow to the global gambling capital, which was already struggling and trying to recover after the biggest drop in revenue since 2015. This suspension will be the longest in the gambling industry and the second time so far: in 2018, casinos closed for 33 hours due to the typhoon. These measures are aimed at stopping the infection from spreading in China and the region as the risk of catching the virus is significantly higher in a crowded environment. It is worth noting that global panic observed worldwide has leaked into the financial markets, which resulted in the increasing demand for safe-haven assets.
Bitcoin recovery from $ 7,150 to $ 9,380 since the beginning of 2020 indicates that amind the raging virus infection traders have turned their eyes on the cryptocurrency market as a safe-haven sector. Given the rapid depreciation of fiat money due to increased risk aversion, Bitcoin once again proves to be the asset of interest. With every manifestation of uncertainty or geopolitical tensions, traders flock to BTC, looking to protect their investments.
Today, market uncertainty is triggered by the frightening scale of the outbreak, which provides Bitcoin with a fundamental reason for continued growth. The main advantage of Bitcoin is that today there are no assets with a similar level of liquidity, that can be easily bought or sold in any economic situation, regardless of regional currency rules and customs control. Another positive feature of Bitcoin is that it can’t suffer from attempts of the world regulatory authorities to neutralize the global economic downturn. According to preliminary data, the new pneumonia virus will slow down China's growth from 6% to 3.8% in the first quarter of 2020. The global economic slowdown may reach 1.5-2%. In such circumstances, the Central Bank will be forced to return to the policy of low interest rates, which will inevitably lead to the devaluation of traditional currencies. In this scenario, inflation-free assets will look very attractive to traders. Bitcoin, which has a non-inflationary nature and limited emission, is among them. With that said, we have all reasons to expect the BTC/USD to hold above $ 10,000 in the near future.