A stock market slump in China is being countered by massive investment into Bitcoin, say market analysts.
Nervous investors, panicked by the coronavirus outbreak and an extended trading floor break in Shanghai for the new year, are holding back over fears for China’s manufacturing output and exports.
However, according to a Coin Rivet article for the Daily Express, moves to pile investments into Bitcoin appear to be picking up pace with a swathe of large fund movements into cryptocurrency over the last three days.
Bitcoin spiked to a new high for 2020, briefly crossing $9,600 as China’s stock markets buzzed back into life on Monday morning with obvious signs of manufacturing and consumer goods being hit hard.
The forecast for physical goods trading in and out of China looks severely weak for the next few months as health officials in Beijing fight to contain an outbreak that has a current death toll of more than 425. Confirmed infections have also surpassed 20,000.
Just as with the SARS outbreak from November 2002 and July 2003, the coronavirus has given China’s economic outlook a depressed tone. Eighteen years ago, stock markets in China and Hong Kong took a huge hit as SARS hit the headlines in a similar way to the latest virus.
Once scientists had SARS under control, the markets soon returned to their natural levels.
Two aspects of the current trading narrative, though, may yet dictate a different outcome this time around.
Firstly, China and the World Health Organisation (WHO) were quickly able to respond to SARS in 2002 and contain its spread in enough time to ease the fears of fund managers.
Secondly, digital assets simply didn’t exist. Bitcoin wasn’t invented until 2009, and certainly didn’t even register on the radar of most traders until 2017.
Now, however, scientists seem unable to restrain the advance of