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Hackernoon logoCoronavirus, Oil Shocks, US-Iran, or PlusToken—What's Behind Bitcoin's Crash? by@FrederikBussler

Coronavirus, Oil Shocks, US-Iran, or PlusToken—What's Behind Bitcoin's Crash?

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@FrederikBusslerFrederik Bussler

Democratizing data science.

2020 is off to a tumultuous start, with an ongoing global pandemic likely to trigger a global recession. The Dow already experienced its greatest decline since the 2008 crisis, and even cryptocurrency markets are blood red, with Bitcoin suffering its biggest price crash in over a year.

This has occured alongside ongoing US-Iran tensions, which were thought to be largely over, until just recently when two Americans and one British soldier died in a rocket attack on an Iraqi base.

Further, global oil demand will remain stagnant or even drop for the first time since the Great Recession.

Finally, those behind a well-known crypto Ponzi scheme, PlusToken (which stole around $2 billion worth of cryptocurrency from investors), have moved around $100 million worth of Bitcoin to "mixers" in order to disguise their traceability, and ultimately make a getaway to fiat through an exchange.

What do these all have in common?

These seemingly disparate events all have one thing in common: They've had undoubtedly large impacts on markets, both traditional and alternative (like the Bitcoin market).

The seemingly impossible question to ask is "how much impact did each event have?"

Some causal chains are pretty obvious. The spread of the coronavirus means that fewer people are travelling, which is the main reason airline stocks are tanking.

Others, not so much.

Is Bitcoin crashing because it's not the safe-haven we thought it was, and investors are just as afraid in the crypto market as traditional markets? Is it because people are freaking out over PlusToken? Is it none of the above?

If you're expecting a simple answer like "Coronavirus is 60% of the cause, US-Iran is 5%, PlusToken is 20%, and Oil is 15%," then I'm sorry to dissapoint you, because those numbers are completely made up, regardless of who makes a go at it.

Instead, I'll propose this:

Focus on blockchain innovation, not on price movements.

By its very nature, price is an infinite, undying source for the news. When there's nothing better to report on, there's always the option to make headlines that read "Bitcoin Up/Down X%."

We can do better. Fortunately, there are many better things to report on.

For starters, you can now contribute to clean energy and fight climate change on the blockchain, by investing in a tokenized solar fund (disclaimer: I'm a consultant at the group behind it, Invictus Capital).

In spite of all the doom-and-gloom, real-world solutions are making their way into the markets, and it's just up for them to be widely adopted.

Companies like Odem are using blockchain in the fight against coronavirus.

Of course, the efficacy of these solutions, whether it's blockchain-related or mass-market, like Trump suspending travel from Europe, are all yet to be seen.

We're in the midst of some of humanity's greater challenges, so let's shine a light on potential solutions, not the price of Bitcoin.

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