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The recent announcement from Moderna, a US pharmaceutical company, changed the mood in the stock market. The announcement was about the result of the early trial of its COVID-19 vaccine stating that all 45 patients produced antibodies that could help to fight the pandemic. Obviously, the stock market soared and began its week with great figures. As of 9:46 am on May 18th (EST) at NYSE, DOW30 went up by 3.15%, S&P 500 by 2.7%, and Nasdaq by 2.1% compared to the market on the last Friday.
Now, how will this wonderful news affect the price of Bitcoin?
Since everything in the world now is centered around the COVID-19, we can assume this news will influence the price of Bitcoin. Let us look at the graph below that shows the trend in COVID-19 cases around the world and the price of Bitcoin from January 22nd to May 16th, and figure out what may happen in the upcoming days and what we should do in preparation.
In the beginning, the cases of COVID-19 infection went up slowly. (p.s. Not many countries were actively testing their people back then). At the same time, the price of Bitcoin showed an interesting upward trend and even breached the $10,000 level. According to Edward Moya, a senior market analyst at OANDA, one of the reasons behind the price soar was because of people’s ‘belief’ that the spread was something that will end in the first quarter. Also, Michael Sonnenshein, a managing director at Grayscale Investments, saw Bitcoin as a store of value.
However, everything changed on March 12th. The Bitcoin price plunged by almost $4,000 in one day and the COVID-19 cases began to rise more rapidly. Why March 12th? What caused this to happen? One day earlier, on March 11th, the World Health Organization declared the COVID-19 a “pandemic”. The world realized that the virus will be a threat for a long time. Many people began to liquidate Bitcoins they owned into tangible assets like gold.
Moreover, traders went for short selling in various cryptocurrency derivatives exchanges causing the price to plummet. The world and the Bitcoin market were both in fear.
Nevertheless, some traders saw this as an opportunity to get more Bitcoin in their wallets. On the very same day when the Bitcoin price dropped, $1.3 billion in fiat and cryptocurrency were deposited onto Coinbase which was five times the typical average. The new signups were doubled, the active users were tripled, and the trade volume was sextupled.
It is time to get back to the story of Moderna. Like the event on March 12th, the news from Moderna will definitely have an impact on the Bitcoin price. There is a perspective that the price will go down as the stock market becomes more active and the trust in the country and the system goes up. Concurrently, another perspective believes that since the vaccine is still in an early stage, it will not be enough to offset the upward trending force of Bitcoin.
No matter what direction the price takes, we must understand that the time we live in is not stable. Every day, we should anticipate some volatility in the Bitcoin market, and we must prepare ourselves wisely. Using cryptocurrency derivatives exchanges such as MCS (MyCoinStory.com) is a good investment diversification strategy you can take.
Finding a vaccine certainly is great news and let us make it even greater by profiting in the volatile Bitcoin market.
Traders always come first on MCS.
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