It is reported that we are on the verge of fighting a severe coronavirus disease. More than 300 people died of critical diseases and thousands of people have been affected and are still struggling with a new type of virus. The virus is likely to have a dangerous and lethal effect on the human race. Right now, the whole of China has cut the root out of the world. People have been house arrests for many days due to the virus breakout. In this epidemic situation, where more than dozens of countries are trying to combat it, the economic situation will certainly have an impact on the global system.
The first outcome that represented the crucial activity of the global market is a drop in the price of oil. The Organization of Petroleum Exporting Countries (OPEC) has announced that 20% of the price of crude oil has plummeted. The consequence is a disruption of the equilibrium of the price of oil on the international market.
The demand has crashed and 20% of the price of crude oil has declined only because of the medical emergency in China. Anyone could conceive of the connection between these two things that are naive the relation is straight to the price of oil. Since China has been inaccessible for a few days, consumption of oil has declined from the international market. Decreased demand leads to massive production and falling prices. Banning flying, as well as nearby production, often reduces the consumption of oil in China. China was unknowingly building up a market with higher oil supplies with low demand for the world.
Thus oil prices tend to decline due to the measurement of supply and demand, so reducing production is the only way to stabilize the market or oil price scenario. The production has already been restricted by two nations, Libya and Russia. The shutting down of the Lybia pipeline avoided 800,000 barrels of oil a day. Russia aims to monitor production and to reduce supply by 1.8 million tons. These two events were hoping to regulate the price of oil on the international market.
However, coronavirus is acting negatively on the price of oil, while the price of bitcoin has risen and is showing stable movements. Not surprisingly, bitcoin never acts as a traditional market. Where shareholders fear losing money on oil, they may withdraw the investment and enter the crypto industry. The fall in oil prices will not only have an impact on the world economy but will also have an impact on the crypto industry.
Nevertheless, since bitcoin is considered a kind of asset, it is likely to attract oil traders to bitcoin. Holding the asset secure on a shared network is the biggest trend today. Bitcoin is now growing strong, and it’s the best time to keep the commodity safe on the digital platform.
Now the bitcoin halving is close and the business predictors expect the price to increase. A bit of contemplation is shown in the first month of 2020. Choosing BTC over-investment in crude oil is now secure. The movement could be visible if oil prices do not tend to stabilize.
By the time Bitcoin is acting as one of the main platforms for safe investment. Coronavirus assault in the centre of China is blocking the relation of the planet. People are house arrests and workers are on holiday for weeks from the Chinese New Year. Although China monitors the export and import situation within the country to stop the major outbreak, it also decreases fuel consumption.
Coronavirus, oil price and bitcoin are associated while these three act differently on each other’s gestures. Although oil prices play a major role in regulating the world economy, the fall in prices rising lead to inflation. The threat of global inflation could, therefore, be the explanation for the fund’s switch to Bitcoin. Raising the price of bitcoin has a positive effect on the inside of the crypto market.
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