A month has not yet past after the start of all this pandemonium, but it already feels like a quarter. Still, there’s almost no fundamental data to analyze. Therefore, how much our industry has been affected by the global economic shut-down is not yet clear.
Chainalysis’ March 30 “Covid-19 is Changing the Relationship Between Bitcoin Price and Bitcoin Spending” brief report is one of the first, which has became available for a review.
It prefaces: “… we analyze Covid-19’s effect on the consumer side of Bitcoin by looking at how transaction patterns have changed across three service categories: merchant services, gambling services, and darknet markets.”
I shall say “all falls down”, to express this report’s findings.
Nonetheless, there’s a subtle difference. It’s been generally expected that on-line betting / waging as well as sale of illegal substances would be less affected by spot market downfall or even be rising (a notable negative correlation).
However, the “strength of correlation” between BTC sent to subsidize consumers activity in those two sectors is subsiding. Other saying: “Gambling usage didn’t start to fall until some time after the Bitcoin price drop, and continued to fall even when Bitcoin’s price started to recover.”
Looks like, consumers had been traumatized by current events to the extend that they have even stopped to dope and to gamble.
At the same time, a habitual dynamic for Bitcoin’s receiving by merchants has been reversed. It used to be correlated negatively (price drops — people feel less BTC rich — they spend less on coffee). This time it appears that consumers were actively spending BTC on buying staff like toilet paper just as they did in the fiat economy.
What does it mean? That’s how authors put it: “The drastic changes in usage patterns for different types of cryptocurrency businesses make it clear that this is no ordinary Bitcoin price drop. It’s a one-of-a-kind market event brought on by an unprecedented public health crisis. The question for cryptocurrency businesses is whether or not they’ll be able to return to their previous transaction levels and if their customers’ usage patterns will return to normal as both Bitcoin and the economy itself recover.”
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