The world is shocked at the moment on the rise of a deadly epidemic from China named Coronavirus, which has till date claimed over 1000 lives, with over a mind-numbing 90,000 cases registered. No perfect treatment for the disease has been found yet, and the death toll is sharply rising day by day. In fact, the number of deaths caused by Coronavirus has gone past those caused by the dreaded SARS disease which appeared in China in the early 2000s.
While epidemics like these are a global health disaster, they can also inflict serious dents on the economies of infected countries and those countries who have strong ties with them. In fact, the world has already begun to see the economic damage caused by Coronavirus across industries and business sectors. In this article, we will try to observe and understand the serious implications the deadly virus will or can have on the crypto-blockchain industry.
The Coronavirus Emergency
The recent Coronavirus disease was first reported on December 31, 2019, in Wuhan City. Since then, the disease has spread like fire and victimized tens of thousands of people within a matter of weeks. The World Health Organization has already declared Coronavirus a global health emergency, and a WHO team arrived in China on February 11.
As of date, about 15 cities and a population surpassing several million, are under quarantine in China. Apart from China, several other countries have reported positive case for the virus, including Australia (15+), Canada (7+), France (11+), Germany (16+), India (3+), Japan (135+), Malaysia (18+), Singapore (47+), South Korea (28+), Taiwan (18+), Thailand (33+), UK (8+), USA (13+), Vietnam (15+), UAE (8+), etc.
All in all, the threat of Coronavirus is spreading quickly, and the world seems to be unprepared for this, with no significant treatment coming to light. Several countries have prohibited their citizens from traveling to China, and governments are taking cautious measures to evacuate their citizens in China and bring them back home after thorough tests for Coronavirus.
Impact on the Global Economy
Like other major global epidemics, Coronavirus is expected to have a serious impact on the world economy, mainly due to its burst in China, the largest consumer market. On Monday, Canada’s Finance Minister Bill Morneau stated that the virus will have a real impact on the countries economy. He said, “I do want to acknowledge the virus is undoubtedly going to have an economic impact. We know the impact is real.”
Most industries are shutting down in China, and the number is still increasing. Therefore, production is taking a big hit, and this will soar the prices of commodities to which China exports heavily, and frankly, that includes almost every major economy. Also, as the GDP of China is likely to fall sharply, at least for the current quarter, the global growth estimates will go down drastically.
Crypto Industry Extends Support in Fight Against Coronavirus
The crypto industry was among the first major sectors to come forward to support the fight against the horrific disease. Binance Charity was early to react, as it began working with the Chinese Corps to distribute over 70,000 masks in the infected areas. Following the footsteps, other prominent names from the industry, like Qtum Chain and TRON came forward to help the cause. Several major events were postponed to prevent any further spread of the disease in public gatherings.
China is one of the Major Crypto Markets
After North America, China continues to be the most important market for the crypto-blockchain industry, not only in terms of sales and adoption but also in terms of the number of start-ups emerging from the nation. The country is the birthplace of major crypto companies including Binance, TRON, Huobi, etc. Therefore, it is safe to say that China is a massive breeding ground for crypto minds.
Secondly, China is arguably the biggest market for blockchain adoption. Chinese President Xi Jinping himself has been a strong promoter of blockchain technology, though being a staunch critic of cryptocurrencies. Right from peer-to-peer payments and e-commerce, to telecom, smart identification systems, and finance, blockchain has spread its wings far and wide in the country.
All of these factors make China a powerhouse for blockchain and crypto development, and any slowdown in the country can severely impact global figures.
A decline in Industrial Activity in China Can be Devastating
China has been hostile towards cryptocurrencies, as the People’s Bank of China, the banking regulator of the country, had effectively banned crypto trading per se. However, the Asian powerhouse is a fertile ground for crypto mining, and the mining industry itself accounts for billions of dollars each month from China. The local Bitcoin mining in China is so big, the Inner Mongolia Province decided to limit the activity in the region. Therefore, shutting down industries also includes mining, and therefore, the steady supply of fresh blocks is bound to get affected.
Secondly, due to the limited economic movement on the ground, crypto-based payments have come down significantly, which is another major setback to the industry as a whole. Due to the low demand from China, global markets can face temporary stagnation, and that’s bad news for the already saturating crypto industry. As the situation in China worsens further, the entire blockchain ecosystem in the country will come to a standstill, and that’s nothing short of alarming for the industry!