Fears overshadow the future of cryptocurrency markets following recent gains due to Covid-19, according to some experts.
Bitcoin is up 133% since 15 March. Widespread US closures of schools and businesses began at the same time due to the Covid-19 corona virus.
This sharp rise has helped Bitcoin rebound to 64% up for the year so far, after crashing in March along with stocks. Bitcoin was around $6,500 on 24 March. Five months later, it’s near $12,000.
Bitcoin’s rise wasn’t unique, as the performance of so-called “altcoins” was more impressive or alarming. Ethereum network is up 210% this year. Stellar Lumens is up 130%. Cardano is up 274%. Algorand is up 200%.
But this breakthrough in the value of Bitcoin and altcoins in the wake of Covid-19 has stoked fears of another risky bubble for cryptocurrency markets as happened in 2017.
Andy Bromberg, president of Coinlist, thinks this period following Covid-19 might be different. However, he sees a glimmer of what happened three years ago.
“So as an investor in the space, you should be cautious, because the more good things that come out, the more scammy things come out too. But you should also be excited,” he added.
Still the important question: Did the Covid-19 pandemic lead to the rise of cryptocurrency prices?
According to cryptocurrency investors, the answer is yes—in part. Most of them point to the actions of the Federal Reserve, and of other central banks globally, as fuel for the appeal of Bitcoin as a hedge.
“Uncertainties always spread in the sphere of pandemics, but one thing that seems almost assured is when you print trillions of dollars more paper money, it’s going to drive up Bitcoin and other cyptocurrencies,” Dan Morehead, CEO of crypto investment firm Pantera Capital, said.