Coronavirus is serious business.
The viral respiratory disease has knocked out global economies, dropped the price of stocks and cryptocurrencies, and given the US government an excuse to pump trillions of dollars into the economy through a massive bailout measure. What effect that actually has on the economy remains to be seen.
— STEVEN CHEN (@chinomaster7788) April 3, 2020
The above tweet seems almost a response to my previous article, which asked the question as to whether or not Bitcoin could be considered a hedge against coronavirus. I did reach the same conclusion, though, judging by the market: Bitcoin is no hedge against a major pandemic. At least not this one. Some have later argued that the problem has just not been big enough for Bitcoin.
Coronavirus may affect other areas of the Bitcoin economy. As the price drops, the incentive for miners, or indeed their viability at all, drops with it. One author argued recently this could lead to a drop off in smaller miners.
That’s only the beginning, of course. A prolonged depression, and indeed prices heading south again, will eventually lead to other types of businesses going out, and eventually larger miners too.
Bitcoin would be secure with a fraction of the mining that’s done on the network. It has a severe overkill due to the wide competition for block rewards, which are also scheduled to cut in half next month.
Some believe this alone will lead to a price increase. A newfound scarcity will matriculate into the marketplace, and people will end up having a higher demand for BTC than they have before.
No Bitcoin Conferences
But one way that Bitcoin and other cryptocurrencies have historically spread has been through conferences. There won’t be conferences in most of the world for the foreseeable future due to coronavirus. Therefore the price of cryptocurrencies, especially Bitcoin, will likely suffer this year in yet another way.
The virus has made quick business of global markets, including crypto markets, and it continues to demand a price from traders and investors alike. At this point, it’s hard to tell if the world will ever be the same.
One ideal scenario is that Bitcoin users respond by finding novel ways around coronavirus. Host virtual conferences, for example, with virtual walk-throughs where you can see booths and everything.
Decide to use Bitcoin and other cryptocurrencies to make purchases, in order to promote their usage. Businesses give new coronavirus discounts for people that pay with crypto.
All of these things could lead to a better price for cryptos, if they could spread adoption. People have time to research Bitcoin in isolation, after all, but Bitcoin proponents would have to get the information in front of them somehow.
Perhaps what it looks like is Bitcoin users showing up in random Facebook groups, offering a little BTC in exchange for people’s time. Something along those lines, using the Lightning Network, you could send small amounts.
Whatever form the next adoption curve takes, it’s crucial that crypto users adapt to the coronavirus realities, and find ways to spread the message nevertheless.