How Cryptocurrency Industry Is Responding to COVID-19

The coronavirus has now become the biggest topic of 2020. How is the blockchain world reacting to the outbreak? Since January, Coronavirus (COVID-19) has dominated the news cycle. With wide-ranging effects on public health policies, market conditions, business practices, supply chains, and more, the outbreak has become this year's most significant global event. Here's how the blockchain world is responding to the matter.

Companies Are Standing Strong

Few if any cryptocurrency companies have shut down entirely in response to the virus. Binance and Hodl Hodl, for example, have noted that they rely on worldwide offices, meaning that their entire workforces are unlikely to fall ill. Other companies, such as Coinbase and Messari, have asked some employees to work from home.

Companies must also respond actively to the outbreak. Regulators in New York have just demanded financial risk plans from crypto companies under its jurisdiction, such as Coinbase, BitPay, Gemini, Ripple, and Square. Other companies, such as Kraken and Messari, published pandemic contingency plans on their own accord in February.

Some projects are even funding the fight against Coronavirus. Binance pledged 10 million RMB ($1.5 million) of medical supplies in January and donated additional supplies this month. Huobi, a competing exchange, has set up an equivalent fund. Gitcoin, a crowdfunding platform, will also offer a $100,000 grant to research and relief projects.

Quarantine and Social Distancing

Several events are being shut down for public safety. Hong Kong's Blockchain Week, South Korea's Nitron Summit, Paris' Blockchain Week, and Italy's Ethereum EDCON have been postponed or canceled. Meanwhile, Coindesk's Consensus 2020 event has been moved online, marking the first-ever virtual edition of the conference.

One past conference was responsible for an outbreak of Coronavirus. Seven high-profile community members who attended EthCC Paris in early March have now reported positive test results. Though none of the individuals appear to be in serious condition, they are urging other attendees to get tested for the virus.

Government activity is also relevant. The People's Bank of China is experiencing setbacks due to the virus, which will delay the country's national digital currency. Elsewhere, the U.S. Securities and Exchange Commission has asked employees to work from home, which could affect decisions related to ICOs and crypto startups.

Cybercrime and More

Bad actors are taking advantage of Coronavirus fears, and cryptocurrency is instrumental in some of their plans. Hackers have created Coronavirus alert maps that appear to be legitimate applications. But in fact, these applications download ransomware, lock down your device, and demand that you pay Bitcoin to unlock it.

Other projects are arguably unethical rather than illegal. Coronacoin is a new token which adjusts its supply based on the number of virus cases, giving coinholders a way to bet on the pandemic. Though the project's website has been suspended, it had the potential to do good: it planned to donate 20% of its value to the Red Cross.

Likewise, a fundraiser called CoronaHope is circulating on social media. It supposedly plans to develop an unregulated vaccine without government clearance or official trials. Its organizers are hidden behind an anonymous email address and are seeking crypto donations―making the effort misguided and disreputable.

Market Crashes

The cryptocurrency market has been hit hard by the virus. Bitcoin lost 50% of its value on March 12, when prices fell from $7648 to $3687 over the course of a day. That price crash also affected most other altcoins, excluding dollar-pegged stablecoins. March 8 also saw a smaller crash that caused Bitcoin to lose 10% of its value.

It remains to be seen whether similar price crashes are in store for the future and whether Bitcoin can return to its previous highs. Bitcoin's price appears to have stabilized above $5000 as of Tuesday, March 17. This is considerably less than the $7000 to $9000 price range it has maintained since mid-2019.

Both price crashes corresponded with wider stock market crashes, which have been widely attributed to Coronavirus concerns. However, other explanations for Bitcoin's price crash have also been proposed, including massive selloffs relating to PlusToken and an unknown "whale miner." It is arguably impossible to establish a clear cause.

Looking to the Future

Bitcoin prices are undoubtedly the greatest cause for concern when it comes to the Coronavirus's impact on the cryptocurrency and blockchain world. It seems unlikely that crypto companies will be severely impacted, and conference events are of secondary importance. In any case, Coronavirus will continue to be newsworthy as time goes on.