How does COVID-19 influence the current cryptocurrency market?

When we think about COVID-19, we automatically start envisioning a lot of misery, hardship and agony. There are 26.9 million cases worldwide with almost million deaths, it is obvious that oblivion would follow.

Before analyzing the cryptocurrency market fluctuations during the pandemic, let’s understand a few important things.

Which sectors took a hit because of COVID-19

A very big chunk of any country’s economy is built on consumer spending. People are avidly avoiding offices, restaurants, stores, offices, movie theatres, and other places where they would otherwise spend money.

Here are the 5 sectors that took the biggest hit as a result of the pandemic:

  • Oil

    Nearly the entire world went into lockdown to contain the spread of this deadly disease. As a result, the demand for oil fell by over 30 million barrels per day. During April of this year, oil prices in the United States fell by a record low, close to negative $37 per barrel. Fortunately, following easing lockdowns all over the world, oil prices have gone up, potentially abolishing a possible economic worldwide collapse.

  • Tourism

    This May 2020 article states that by analyzing available data points, there was a 22% decrease in Q1 2020, with a 57% decrease in arrivals during March. This translates to a 80$ Billion loss in receipts.
  • Automobiles

    The pandemic truly has devastated the Automobile industry. The sales have fallen by approximately 20% during 2020.

covid 19 influence cryptocurrency


  • Aviation

    This sector has not only been completely devastated, but leading airlines, Airbus and Boeing, have asked for help from their respective governments and stated that if no help arrives, they will have to close up. From January 2019 to April 2020 the global passenger revenue for aviation has fallen by 94%.



  • Luxury goods

    This market also took a hit. As we can see from the graph, the sales have plummeted in 2020, but forecasts are high for upcoming years. Nearly 40% of luxury goods are manufactured in Italy, and we all know what happened there… As such, luxury manufacturing companies lost their base.

luxury goods


When did Bitcoin fluctuate, and what were the root causes.

As we can see at Kriptomat’s BTC value chart, the price of Bitcoin has fallen substantially during 2018 with its largest drop in February 2019. This happened after Bitcoin reached a new all time high value on December 25, 2017.

bitcoin fluctuate


But why exactly does Bitcoin or other cryptocurrencies fluctuate? The honest answer is – extreme low liquidity when compared to other forms of money and investment.

Bitcoin is a tiny niche market of a hundred billion or so. There are living individuals who have much more money than the entire market cap of Bitcoin. The market cap needs to reach at least a trillion to achieve a stable market. Once that happens, and things are primarily priced in Bitcoin, we will achieve zero volatility.

So what happened in 2018? Let me introduce the person responsible for the entire crash.


Nobuaki Kobayashi

So why exactly is this dude responsible for the greatest crash in cryptocurrency history?

Mt. Gox was a bitcoin exchange. Their fundamental job was holding people’s money and being a medium for exchange from one currency (Euro, for example) for another (Bitcoin).

Mt. Gox was sitting on a veeeery large amount of Bitcoins that were owned by other people, and became a de facto bank, which they were not supposed to be. Their software was in a very poor state and was vulnerable to hacking, which interfered with people withdrawing their Bitcoins.

As a result, after the hacking incident, Kobayashi started dumping their Bitcoins for a low price. In the chart we can see the result of him dumping Bitcoins on the market value. The arrows on the chart below mark the dates of every individual Mt. Gox wallet transfer.


Fortunately such cases have not happened frequently throughout history, and the price of Bitcoin only saw rise after 2018.

What happened to the cryptocurrency market when covid 19 started.

bitcoin btc

As we can see from the graph above, the current bitcoin price is at 8820 Euros. The graph also shows the entire year’s BTC price, and as we can see there have been various fluctuations in price, with the lowest point being March 15th at a price of 4916 Euros.

Let me explain how price moves up on a specific exchange:

It is basic economics, just like in an auction.

If everyone wants to buy a rare pokemon card, the price of that card changes and it goes up and up… The seller makes more money, and the buyers spend more money – the price of the card keeps changing based on how much people want it or don’t want it.

It’s simple, people want bitcoin, the price goes up. More people wanna sell bitcoin, the price goes down.

March and April were the hardest hit months by COVID-19, most countries were in total lockdown and civilians had one thought – buy as much toilet paper as possible… As a result of worldwide panic, people wanted to sell their possessions (including Bitcoins and other cryptocurrencies), and prepare for the inevitable collapse of all markets.

Following those months of turmoil, the prices have gone up almost twice.

Forecast for the future.

It is understandable that because of COVID-19, most people are afraid of risking investing their money into literally anything. The good news is, most countries are working on a vaccine. According to this article by BBC, “Most experts think a vaccine is likely to become widely available by mid-2021, about 12-18 months after the new virus, known officially as Sars-Cov-2, first emerged.”

The forecasts point from early 2021 to mid 2021 for a vaccine, which means life will go back to normal soon. Following data from this cryptocurrency market, so far the price is stable, but if you are looking to invest in Bitcoin, now might be a good time because when life really does go back to normal, it is very possible that prices will go up since demand will increase.

Stay healthy!

Dinesh Kumar VM

Professional Author @ Time Business News | Contributor at London Business News & at UK News Blog. Checkout my personal blog at