What kind of thinking does the new crown epidemic bring to the currency circle?

While people in the currency industry are glad that the fluctuating 2019 has finally passed, and full of anticipation for the arrival of 2020, a new type of coronavirus event affecting the whole of China and the world has appeared, and 2020 will be hit hard from the beginning. The impact of the new virus has spread to all aspects of society, and the currency circle is no exception. What changes and interesting things have happened in the currency circle during this virus's wanton Spring Festival?

There is love in the world

This Spring Festival has been very sad, the epidemic situation has been worsening, and the number of confirmed patients is increasing every day. For a time, masks have been frantically fired. Masks that originally sold for ten dollars were sold for hundreds of dollars, and the supply was far from sufficient.

According to statistics, in Hubei alone, the number of confirmed new coronaviruses has exceeded 10,000. Suspected cases are increasing day by day, medical conditions cannot keep up, and supplies are seriously lacking. The state attaches great importance to it, and people from all walks of life also donate materials to Wuhan through various channels.

According to the statistics of the ostrich night shift editorial department: Lucia community, Matcha exchange, Hangzhou Funchain Technology, Huobi Group, Binance Group, Quantum Chain Foundation, Digital Asset Research Institute, Jinye Capital, KuCoin trading platform, Eurotech Group (ranking (In no particular order) and other companies in the currency circle have contributed strength, donating funds and masks and other materials. According to statistics, the donation of the blockchain industry alone has reached hundreds of millions. No doubt brought a little warmth and sunshine to the epidemic area.

Although the blockchain industry is a niche industry, during this epidemic, its role and contribution are no less than any other industry. An industry with love and strength is destined to go further.

What role can blockchain technology play in this epidemic?

As mentioned above, the value of materials and funds donated by the currency circle alone has exceeded 100 million yuan. According to the social donation announced by the Chinese Red Cross Association, as of 17:00 on January 31, 2020, the Chinese Red Cross Association and the Chinese Red Cross Foundation have jointly accepted the prevention and control of pneumonia epidemic for new coronavirus infection. The social donation was 84,972,200 yuan. Among them, 6.569581 million yuan was received, and the value of materials was 192.765 million yuan.

Some netizens commented: Don't the world ’s donations provide a Hubei province? In this regard, the Wuhan Red Cross Society was attacked by many netizens. It was questioned a lot. Where did the materials and funds donated by the society go? Why is the Red Cross Society so opaque?

The epidemic made all sectors of the society deeply aware of a problem: how to solve the problem of opaque data and information of third-party agencies. And blockchain technology may become a feasible solution.

If the materials donated by all parties are put on the chain, the blockchain technology is used to build the material chain, realize the data integration of materials available from all sectors of society, and track the transportation, storage, and flow of materials in real time. Sharing and querying the whole society may be able to reconstruct social trust.

In terms of material donation and distribution scenarios, there are two ways to deploy a blockchain material chain architecture: one is to build a dedicated chain, placing all organizations involved in material donation and distribution on the same chain, within each organization Deploy multiple nodes. Query data and other materials through the chain to track the flow of materials.

The second way is to use the organization type as a unit to build a chain of logistics, government departments, charitable organizations, and distribution channels to form an alliance chain so that the information of various units and organizations can be coordinated and the efficiency of work can be improved.

In addition, the accuracy and transparency of information related to epidemic prevention and control can also be achieved using blockchain technology. The Party Committee of the Internet Industry of Guangdong Province released on January 31 "The role of party organizations and party members should be brought into full play, and the combined forces of prevention and control of epidemic prevention and combat can be combined." Means to provide comprehensive, accurate and objective information and data services for epidemic prevention and control to decision-making agencies and the majority of netizens. Nanjing Audit University organized the development of an epidemic prevention and control blockchain system to collect information on epidemic prevention and control.

Of course, relying entirely on blockchain technology is not a panacea, such as issues of information privacy, difficulty of listing, time cost and other issues. The key is to fundamentally eliminate the problem and not rely solely on technology.

Does the epidemic affect the digital assets and blockchain industry?

Perhaps the most interesting and controversial issue is: Does the outbreak affect Bitcoin? And does it indicate that Bitcoin is a safe-haven asset?

Nigel Green, CEO and founder of deVere Group, believes that as traditional financial markets are hit by a new coronavirus outbreak, investors see cryptocurrencies as a safe haven. From the data point of view, from January 24 to January 30, in the performance of global assets, A50 fell more than 7%, US stocks fell more than 3%, and Bitcoin led the rise. BTC rose from $ 8423 on January 24 to $ 9,509 on January 30, an increase of 12.89%. In this regard, many analysts see the continued rise in bitcoin prices as related to the spread of new coronaviruses. Is the price of Bitcoin really affected by the epidemic? Did the outbreak really prove that Bitcoin is a safe-haven asset?

The epidemic may have some impact on digital assets, but it is by no means decisive.

Historically, it seems that negative news has always been accompanied by rising prices. Perhaps the epidemic triggered panic in the currency circle, which in turn boosted investment in digital assets. But in addition to the epidemic, we cannot ignore another major event in the 2020 currency circle-Bitcoin halving. Less than 100 days before the Bitcoin block reward is halved. With Bitcoin halving, price increases seem to be a consensus.

For a detailed explanation of Bitcoin halving, you can read related articles in the editorial department of Ostrich Night Shift.

[Bitcoin halved, bull market or crisis?

[Science 丨 Everything about the next Bitcoin halving ]

Before, Bitcoin was considered by many analysts as a safe-haven asset, and coupled with the halving effect of Bitcoin, it is said that the price of Bitcoin will rise sharply. However, during the epidemic, the price of Bitcoin once fell below $ 8,300. Gradually rising, but the price in the middle is also constantly fluctuating. But the scope is smaller. Therefore, the impact of the epidemic on Bitcoin has not been particularly significant. Nor does it seem to meet the requirements for safe-haven assets. First let's look at the definition of safe-haven assets: Safe-haven assets refer to a class of relatively stable assets that do not fluctuate too much in price as the market changes, such as gold, US dollars, and so on. The core attribute of safe-haven assets is stability, and in 2018, Bitcoin dropped by 85%, and in 2019 rose to more than 10,000 knives, an increase of 100%. From this point, it does not meet the characteristics of safe-haven assets. There are still too many speculations in the currency circle, the Bitcoin market is volatile, and the risk attribute is stronger than the hedging attribute. Bitcoin cannot meet the need for hedging, and the so-called "hedging" is just a kind of hype.

In the long run, the epidemic may profoundly affect the way society behaves, from the way government works, to the way people live and consume, and the form of company production and organization, but this effect will not have a direct reflection on the short-term investment market. The epidemic will not change the nature of investment. It will disrupt market sentiment in the short term, but the market will not change the long-term operating trend.

Does the central bank's investment of 1.2 trillion yuan affect the currency market?

In order to maintain reasonable and abundant liquidity of the banking system and the smooth operation of the currency market during special periods of epidemic prevention and control, the People's Bank of China launched a 1.2 trillion yuan open market reverse repo operation to invest funds to ensure adequate liquidity supply. In this regard, people in the currency industry have expressed their opinions. Some people have said that this is a great benefit to the currency market: the placement of liquidity is conducive to the stability of the financial market, revitalizing the market, and avoiding the sharp fluctuation of the currency market. It is good for the currency circle. Some people think that the two have nothing to do with each other. The ostrich night shift editorial department agrees with the view that it has not affected much.

First of all, the People ’s Bank of China ’s 1.2 trillion yuan open market reverse repo operation is funded through the commercial banking system and released to enterprises or institutions in the form of terminal lending or low mortgage rates. The provision of liquidity is mainly to respond to entities in the epidemic enterprise. The crypto economy is almost negligible in the real economy affected by the epidemic, so it is less likely to flow into the currency market.

In addition, the 1.2 trillion yuan of liquidity invested by the central bank is almost nothing for the entire society and the enterprises and markets that have been widely affected by the epidemic, and it can play only a small role.

The key point is that the central bank's attitude towards crypto assets such as bitcoin has been fully reflected at the end of 2019. The currency circle is facing self-protection, the central bank's digital currency is entered, the good currency drives out bad currency or the future trend. The central bank will not "Dialing money" boosted the digital asset market. The crypto market is only worth 200 billion US dollars. If the central bank allocates tens of billions into the digital asset market, it may bring drastic changes to the market and directly increase Bitcoin. "The central bank had no intention, and the currency market was very passionate." It can be said that the operation of the central bank is not much related to the currency market. If there is any connection, it may be to provide psychological comfort and bring positive emotions to the currency circle.

The society temporarily "stops running", making it difficult for miners to sell

Due to the impact of the epidemic, many regions of China have implemented closed management, railway outages, road barriers, and closed communities. It has become difficult for ordinary people to go out, and many factories are unable to start construction. The state recommends delaying the start of work. Logistics has also temporarily stopped.

Jiang Zhuoer, the founder of Leibite mining pool, wrote on Weibo that "traffic and materials are cut off everywhere, and people cannot be moved. Xinjiang is the most exaggerated. Before entering Xinjiang, it is taken away for 20 days and the company cannot resume work. We retained half of our employees a year ago. On duty, now there are not enough manpower, but also the miner's online rate is poor. The main impact is that there are some mines that have stopped construction and power outages, and there are thousands of miners that cannot be called out. The factory personnel are not in place, and the production of the mining machine will be affected. If the market rose sharply before halving, bitcoin has become a steady upward trend at present, the stored mining machines cannot be sold, and the new market demand cannot be met. It is estimated that many miners will be exhausted. Therefore, the epidemic situation still has a certain impact on the mining industry.

No winter cannot be crossed, no spring will not come. The epidemic will always pass, and the bull market will finally come.