As the Coronavirus continues to stoke fears across the globe, rocking both traditional and emerging markets, some silver linings are starting to appear. Here’s the story.
After bitcoin collapsed to $3,867 in early morning trading, the cryptocurrency retraced its losses and currently sits at above $5,000. Long term, “bitcoin will regain poise with risk assets, which will start seeing a sustainable recovery once there is stabilization in the coronavirus infection curve,” Mike Alfred, CEO of Digital Assets Data, told CoinDesk. Get the quote
While the close correlation with stocks challenges crypto’s store-of-value narrative, it seems like investors the world over are bucking all traditional low risk assets. A new survey shows that cold, hard cash with a helping of government bonds – not bitcoin or even gold – is where people turn in the face of a pandemic and market turmoil. Hard money, hard swallow
Though people aren’t seeing crypto as a safe haven, many are using it as an actual currency. Crypto payment processors Lolli, Fold and Strike by Zap are reporting a surge in users, at points so large it’s crippling their systems. Point of sale, POV
Crypto firms are also launching novel products in face of the global rut. Quedex, a Gibraltar-regulated derivatives exchange, launched a bitcoin contract with the longest expiration date in crypto. The firm told CoinDesk the two year contract would not be influenced by market drops such as the one recently sparked by the coronavirus scare. New story
Coinbase has started grouping multiple bitcoin transactions together, rather than issuing sends one by one. The adoption of "batching," the exchange said, will mean less load is put on the Bitcoin blockchain and will further reduce transaction fees for customers. Batching bulletin
Even amid the chaos, people still want in. Makeup mogul Michelle Phan is starting a podcast called “Baby Steps… to help people take steps into adulthood … buying bitcoin, how to store it, what to do with it.” Baby steps
Others argue that this “black swan event” is proving the social usefulness of blockchain technology. “A new generation of open-source innovation and protocols like Intercoin, MaidSAFE and Holochain, is showing how to build provably secure, scalable infrastructure that can handle voting and economies at scale,” wrote Gregory Magarshak, CEO of Intercoin, wrote in an opinion piece. Get out the vote
Still, the industry is fragile. A flaw in Maker’s system for generating collateralized debt positions caused some $4 million in ether to be swiped up for free. Despite a congested network, debt on the Maker platform continues to rise, hitting nearly $5.7 million on Friday. Flash crash |
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Bitcoin has seen an oversold bounce from 12-month lows below $4,000 and could rise further on signs of a risk reset in the traditional markets. While the coronavirus is showing no signs of slowing down, the turmoil in the global equity markets seems to have lessened with Federal Reserve's $1.4 billion liquidity injection. Analysts expect bitcoin to follow price action in the equity markets in the short run. Easing off?
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CoinDesk Research's latest Monthly Report examines Binance, Cash App and Coinbase fiat onramps, crypto's faltering narrative as a safe haven asset, and “criminality” as a use case for crypto networks. The report also looks ahead (and back) to bitcoin halving impacts, as preview to the event slated later this Spring. Full report
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| The coronavirus got really extra real yesterday for markets, after a two and a half week sell-off was tipped to the next level by a major ratcheting up of action from the U.S. government, writes Nathaniel Whittemore. Still, the latest Breakdown podcast presents six reasons to Keep Calm and HODL On |
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