Bitcoin & Corona: How the BTC course benefits from vaccine approval
Bitcoin Corona- How BTC benefits from vaccine approval
Bitcoin returned to positive territory on Wednesday, just as the coronavirus vaccine received UK approval from Pfizer and BioNTech.
The country’s Medicines and Healthcare Products Agency announced the news on Wednesday morning. In the meantime, Pfizer and BioNTech have announced that they will Bitcoin Bank start shipping doses of the two-shot vaccine to the UK in the coming days.
This marks the first major milestone in the containment of the virus, which has infected tens of millions of people and killed more than 1.5 million people worldwide.
Bitcoin reacts positively
The initial reaction of the Bitcoin market to the vaccine approval was positive.
The benchmark crypto-currency rose by up to 2.99 percent, reaching an intraday high of $19,340 before the opening meeting in London. The gains followed a depressed Tuesday, when the price fell by about $1,000 before the close of the trading session, indicating profit taking among day traders.
Technically, the rebound prepared Bitcoin to re-test its record high set the day before. One crypto-trader commented that he was prepared to extend his long targets towards $19,964 – and that the „[bullish] lineup was officially triggered“. Basically, it seemed like a signal for a further adjustment to a record high.
Bitcoin no longer seems „immune
Bitcoin has so far remained immune to news of successful vaccine trials as more mainstream investors have endorsed its bullish stance or have allocated part of their portfolios to it.
For example, Pfizer-BioNtech’s vaccine came out around 11 November with 90 percent efficacy. It triggered a sell-off in the gold market, but did not affect other safe havens such as Bitcoin.
This proved a little bit that the crypto currency is on its way to decoupling from the traditional markets. In the meantime, the price of Bitcoin also rose because many economists welcomed the idea that a prospective vaccine could increase inflation.
According to the report, protection from COVID could boost economic recovery in the US, as people would then be able to spend more. This would push up the price index of personal consumption expenditure, the Federal Reserve’s measure of inflation.
The US Federal Reserve expects to meet its annual inflation target of 2 percent using the same yardstick.
The Bitcoin bulls are treating the crypto currency as an anti-inflationary asset given its limited number of 21 million tokens. On the other hand, the US dollar has no such supply restriction.
In an inflationary environment, the dollar tends to fall lower. It even fell on Wednesday after the British vaccine approval. As a result, the bulls believe that large companies sitting on bearish dollar reserves would eventually exchange some of it for Bitcoin.