COVID-19 Vaccine Crashes Gold and Bitcoin (BTC)

COVID-19 Vaccine Crashes Gold and Bitcoin (BTC)

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The news of a new effective vaccine against COVID-19 caused the price of gold and digital gold – bitcoin – to go down.

The vaccine efficiency in trials is 90%. It was developed jointly by German and American pharmacists, Biontech and Pfizer. Pfizer shares soared 15%. But why did BTC drop?

Earlier, Russia announced the launch of two vaccines after successful testing. But the market reaction was more than restrained. The reason is that the leading countries of Europe and America have declared that they will not use Russian vaccines and prefer to wait for the completion of clinical trials of their vaccine. It is clear that Biontech and Pfizer have gone to great lengths to speed up the vaccine release.

Global trading platforms reacted to the news with optimism. The vaccine, as well as the announcement of a possible extension of the restrictions on oil production and Biden’s victory, led to growth in commodities and indices. Oil rose 9% over the day. The leading stock index S&P 500 increased by more than 3.6%, the dollar began to fall. In these conditions, prices for gold and bitcoin also went down. This is understandable. The cure for COVID-19 promises that the global economic collapse will come to end. This means that there is no need to invest in defensive assets, but one can expand investments in blue chips and other assets that will give a guaranteed profit in a growing economy.

Crypto market experts are still optimistic about another leading cryptocurrency, ETH. Ethereum grew by about 20% in a week and overtook BTC by one and a half times. It is possible that investors are shifting from bitcoin not only to stocks but also to ETH. As for BTC, its decline has been predicted for a long time. Another negative forecast was voiced by economist Professor Nouriel Roubini, who became famous after predicting the 2008-2009 crisis. Rubini is known as a fierce opponent of cryptocurrencies. But in the past year, he has toned down his criticism. And now he made a forecast that cryptocurrencies will disappear in three years again.

In his opinion, it is by 2024 that the era of Central Bank Digital Currencies (CBDC) will come. Therefore, the need for BTC, ETH, XRP, and other cryptocurrencies will disappear. The need to use traditional financial services or bank accounts will also disappear. Roubini spoke about bitcoin again extremely emotionally:

“It doesn’t scale, it’s not secure, it’s not decentralized and it’s not a currency!”

Meanwhile, Roubini admitted that

“It’s maybe a partial store of value, because it cannot be so easily debased because there is at least an algorithm that decides how much the supply of bitcoin raises over time”.

Rubini has long foreshadowed the complete collapse of bitcoin. And he returns to such prophecies with each decline in BTC. His forecast for the fast use of CBDC instead of cryptocurrencies and traditional banking also looks unrealistic.