Coronavirus Special: Li Xiaolai on Markets, Stocks & Blockchain
COVID-19, the coronavirus disease originated in Wuhan, China, hit the world and was announced a pandemic in early 2020. Small retail businesses, entertainment, and hospitality suffered first, the major corporations and stock markets felt the devastating impact of the outbreak too. Did the world of digital become a safe haven for the investors?
Beginning at the end of January lockdowns and restrictions have been implemented within the entire Hubei province and the major cities in mainland China, including Beijing and Shanghai. The coronavirus has affected all levels of business in the country, as thousands of families, were locked at home. With the quarantine measures, Chinese digital life has flourished. The delivery bees hurry to process all the online orders, teachers and fitness instructors adjust their cameras to life-stream, and Weibo – twitter-like social platform has seen a huge blogging spike. The Internet is still running.
The Chinese central bank took measures to quarantine cash, which gave even more opportunities for application and use of blockchain-based digital currencies. The PRC’s government has huge aspirations for the release of the national digital currency, which is reportedly delayed for 3-6 months due to the coronavirus emergency. There were even worries that Bitcoin – the world’s biggest cryptocurrency can face certain challenges with the virus, as its biggest mining pool and 66% of the mining power is located in the Sichuan province of China. Nevertheless, the Bitcoin hash rate has remained steady since the appearance of the coronavirus. Experts say that mining farms are going to remain relatively unaffected by the virus because their operations don’t require a lot of face-to-face contact. But a number of crypto meet-ups, events and blockchain conferences in Korea, Hong Kong, and other Asian countries have all been postponed.
The Chinese stock market has suffered heavily. The Shanghai Composite Index saw the worst single-day drop in nearly 5 years. It plunged 8% On February 3. On February 28, the Chinese stock market suffered another drop. Other major stocks in the US, Italy, Japan, and South Korea stumbled alongside this time. The charts show that the world is going through the global economic shock. Can Bitcoin become a safe haven in times of this financial and biological crisis?
BTCMEX sat down with the first Bitcoin adopter and the biggest crypto holder in China, Li Xiaolai, to ask his opinion on the effect of the virus on businesses, stocks, and cryptocurrencies.
Li says that fighting the coronavirus should be the long run. It will have a pretty long-lasting negative impact on almost every business. The stock markets could go down for a long time as well, showing an end of ten-years-of-ever-surging, but will eventually recover. In these times of uncertainty, crypto might well a harbor for capital to shy away from risks.
The virus infects the economies worldwide. The Reserve Bank of Australia has announced an emergency rate cut. Interest rates in Australia are now at an all-time record low. The US Federal Reserve has also cut the rate to maintain the stability of the country’s economy. Meanwhile, The Supreme Court of India has removed the Reserve Bank of India’s controversial ban on cryptocurrency usage in the country.
Bitcoin price is expected to be traded in a positive zone, as market strategists report the major support levels of $8,760 followed by $8,700, and the major resistance levels of $8,840, $8,900 and $9,000.