The massive strike of the COVID-19 has significantly affected the global economy. Originating from mainland China, the virus has spread to 195 countries, at the time of reporting. Stock markets of many countries are in the red and reached the point of the recession. Even Crude oil, the major market benchmark, was not able to fight against the outbreak as its price tumbled due to low demand.
Initially, major cryptocurrencies (Btc, Eth, and XPR) were fighting well against the pandemic. However, US President Trump announcement, a travel ban to Europe, forced the cryptos to slow down.
China Imposes Further Restrictions
The way Bitcoin responded during the pandemic outbreak seriously questioned its ability as a safe haven. In fact, The Bank of China declassified Bitcoin as a safe haven investment.
On March 22, Bank of China published a post on its official WeChat account, titled, “3.15 Protection of Financial Consumption Rights and Interests,” to warn people about crypto investment. It seems that Bitcoin dominance has disturbed the Bank.
The Bank of China said:
“First of all the amount of fraud transactions with bots are serious. The average turnover rate of the top three overseas cryptocurrency exchanges is much higher than that of foreign licensed exchanges. Second, market manipulation exist in these exchanges where forced leveraged trading eventually causes the exchanges to explode. Third, money laundering is a big issue.”
It’s not the first time Chinese officials sliced down the crypto market. The regulators are constantly imposing restrictions on domestic crypto exchanges. Last year, Alipay halted transactions associated with Bitcoin and other cryptocurrencies.
Although the cryptocurrencies are trading below the lows of the year, upcoming events like Bitcoin halving, and Ethereum 2.0 fork are foreseen to drive the price of the cryptos.