Due to the corona virus, mankind not only experiences one of the most difficult moments in history, but the crypto market is also in a time of change. As the increase in the volume of Bitcoin exchanged on the major exchanges in the first quarter of the year shows.
Corona virus changes
It is a time of change for the entire planet. The expansion of the corona virus has forced most countries in the world to take drastic measures to protect the lives and health of the population. What disrupted the normal functioning of commercial and productive activities.
And if the number of deaths caused by the corona virus were already dramatic enough, the economic damage caused by the necessary measures to deal with death would now be added. With the sharp collapse of financial markets around the world and the promise of a global recession of unprecedented magnitude.
A situation that of course also affected the crypto market in different ways. Unlike the exchanges, whose collapse only started in mid-March, the Bitcoin market has been considering the impact of COVID-19 on the price of the cryptocurrency since the first days of the year.
At this point, many crypto market analysts began to predict that the progress of the corona virus would have a positive impact on the price of Bitcoin. Well, the increasing uncertainty in the markets that this would bring would lead investors to take refuge in capital reserves like BTC.
This belief was part of the momentum of the bullish rally that the crypto world experienced in the first month and a half of the year. However, it was later shown that the corona virus had not redirected the capitals from the traditional market to the crypto market.
On the contrary, the uncertainty that the price of Bitcoin should rise was actually a basic element to explain the breakdown of its price. With the arrival of COVID-19 in the west, BTC lost 49% of its value in less than 24 hours. Fall simultaneously with the main stock exchanges.
The bitcoin volume exchanged is increasing
However, both phenomena, the bullish rally in the first few months due to speculation with crypto traders and the collapse and subsequent volatility of the Bitcoin price, have had an unexpected effect. We refer to the increase in bitcoin volume exchanged on major exchanges.
For example, a study conducted by The Block on the 22 most important stock exchanges in the world showed that the volume of bitcoin exchanged in the first three months of the year increased by 61% compared to the last three months of 2019, from 96 trillion to 154 trillion Dollar.
An increase through speculation?
Given the intense speculative activities on the market in the first three months, this result is of course logical. As traders tried to buy bitcoins during the bullish rally, pending further appreciation. Or sell them as soon as the corona virus affects the crypto market.
Nevertheless, and as can be seen in the graph, this increase in bitcoin volume exchanged on the main exchanges instead of an exceptional number means a return to the volume reached in the second and third quarters of 2019, making it $ 169 and $ 155 billion respectively.
It is currently clear that the average price of Bitcoin in each of the rooms is not of critical importance for the transaction volume.
With a minimum difference between the last quarter of 2019 ($ 7,987) and the first quarter of 2020 ($ 8,311), the transaction volume increased significantly. So the decisive factor in these cases is probably the speed of price changes.
Finally, the question remains as to whether this increase in transaction volume will continue in the course of 2020. Or on the contrary, it is a high point that will dissolve when it returns to values closer to the last quarter of 2019. A. Question that must remain unanswered in a time of such great global uncertainty.