The ecosystem would be “impervious” to the supply chain problems currently seen in the stocks at the national level.
After the coronavirus outbreak affected the main stocks of the world and generated a decrease in the price of Bitcoin from USD 10,139 last February to USD 5,000 on March 13th, the crypto market could be on the road to recover its prices.
This is what Catherine Coley, CEO of Binance, considers. During an interview with the specialized media Bloomberg, she revealed that the coronavirus quarantine drove a surge in the trade volume of cryptocurrencies in Asia. This is something that would happen in the US market.
Coley explained that, currently, both traditional and cryptocurrency markets are playing a long-term cycle. She claims that the markets are experiencing the “CRIC cycle”, in which the “crisis” produces a “response” from the market, followed by “improvements”. After that, the market returns to “complacency” before the cycle repeats. This would be the current situation of the crypto-market.
“So in the regular traditional asset classes, as with Bitcoin, you are seeing that complacency in the market turns into a crisis, creating panic. That is going to generate sell-off across the board”, she said.
Bitcoin Is a Concussion Resistant Asset
According to Coley, since the technology that we can market “24 hours a day, 7 days a week” supports cryptocurrency markets, the ecosystem would be impervious to the “supply chain problems we are seeing in the stocks at the national level”. This is possible because this technology can be commercialized independently of the environment where the operation is executed.
The CEO of one of the world’s largest crypto exchange commented that there was also a resurgence of trading volumes in Asia. This recovery occurred during the mandatory quarantine the government ordered to prevent more coronavirus cases.
“So I think we will see the same thing happen in the US when we get stronger guidelines on what quarantine means for the country”, Coley explained.
Besides, Coley added: “I think they see Bitcoin as something we can continue to engage with, regardless of the safety and concerns of the US and globally”.
Current BTC prices are “accessible” for institutions
The current price of Bitcoin and other cryptocurrencies could attract institutional investment and, with this, generate more purchases of these digital assets whose price would recover in the coming months.
As Coley, David Grider, Fundstrat’s Chief Digital Strategist, and Simon Peters, eToro’s Platinum Account Manager, consider that the coronavirus crisis could strengthen bitcoin price. Peters thinks that the increasing amount of traditional money injected into the system will boost the purchase of cryptocurrencies.
Also, Coley argues that the cryptocurrency ecosystem has matured significantly over the last year. This is another positive aspect that could strengthen crypto-market. The businesswoman gave more details related to this point.
“We have seen a maturation since last year in this space, with institutions being able to identify who are the players in the crypto space, and now prices are affordable for those institutions to come in”, she said.
Coley predicts that Bitcoin’s lack of dependence on the physical world will continue to boost the trading, despite the economic challenges faced during the coronavirus threat. Binance is one example of growth. This company continues to increase the number of crypto assets available on its platform. It recently started accepting USD Coin (USDC) deposits and now seems to be going for more.
By María Rodríguez