The history of digital money is inextricably linked to global economic turmoil. A new type of asset was born during the bankruptcy of the largest banks, but now it itself is losing value, it seems, due to the coronavirus pandemic and the fall in oil prices.
The coronavirus pandemic has begun, which has already affected the economies of many large countries, and in the future it may have an even greater impact. Because of this, the US Federal Reserve had to lower the rate to 0.25%, but the stock market continued to decline anyway.
It can be assumed that in the event of a positive development, the Bitcoin exchange rate will also begin to recover. Now the value of cryptocurrency is falling, because investors prefer to withdraw their funds from risky assets. This applies not only to digital money but also to stocks of large companies. However, as soon as the situation begins to improve, the markets will probably start moving in the opposite direction.
Now, first of all, there has been a crisis of investor confidence in the system, which should take measures to control volatility. However, in fact, none of the measures taken had any effect, but rather even exacerbated the panic, the analyst said.
Whad do exchanges say?
As for cryptocurrency, we still admit the chance of its finest hour, for example, if a series of defaults across countries go and problems with cross-border payments go accordingly. But, while you can take a wait and see attitude, drawing attention to new interesting projects.
Incredible fact — more active users on cryptocurrency exchanges!
According to the Kraken exchange, the number of registrations on the platform increased by 83%. The number of users who completed the KYC procedure for instant deposits in fiat money increased by 300%. Strategic development specialist Kraken Pierre Rochard believes that such an influx of new users to the exchange is not at all connected with the fact that people have nothing to do in quarantine during a pandemic. Most likely, people want to use the crisis and gain independence from the “obsolete” financial system.
At Paxful, a peer-to-peer cryptocurrency exchange, registrations have grown 100% since the beginning of March. Over the past four weeks, the growth of new active traders on the Luno exchange has made 50%. According to Luno CEO Marcus Swanepoel, the pandemic has created uncertainty in almost all areas of activity, and cryptocurrencies inspire confidence in many people in the future.
The Bitfinex exchange reported that the number of new accounts increased by 30% in the second half of March when many countries introduced stringent restrictive measures to prevent the spread of coronavirus. Director of Financial Market OKEx Lennix Lai (Lennix Lai) also noted an increase in the number of registrations on the exchange. He explains this not only with the introduction of quarantine but also with a decrease in cryptocurrency rates.
As the number of users on cryptocurrency exchanges grows, the number of funds withdrawn also grows. According to the analytical resource Glassnode, the amount of bitcoins withdrawn from exchanges is growing steadily, and a few days ago the balance of exchange wallets in BTC reached an eight-month low. According to the Paxful exchange, despite the influx of new traders, the exchange’s profit fell 10%.
On the Coinbase exchange, during the fall of the cryptocurrency market in the first half of March, a significant increase in bitcoin purchases was recorded.
By CitaBit, your safest financial ecosystem