Tag: pfizer

What Pfizer's COVID-19 Vaccine Means for the Bitcoin Price Outlook

Bitcoin has remained in its consolidation phase after its continuous weeks of climbing to new highs. Bitcoin has been trading steadily above $15,000, and has been trading sideways in the past 24 hours, and is currently priced at $15,381 at press time.

While the economy has been suffering since the COVID-19 pandemic broke out, Bitcoin has more than benefitted from the depression, climbing to a new all-time high in 2020. The uncertainty of the post-pandemic recovery has boosted Bitcoin’s price, as many have looked to invest in safe-haven assets like Bitcoin.

Recently, news broke out of a coronavirus vaccine from Pfizer and BioNTech being 90 percent effective, Bitcoin’s price plunged. The vaccine has proven to be effective in preventing COVID-19 among those without prior infection, after at least 1.2 million lives have been claimed by the coronavirus. 

The COVID-19 vaccine news has set a record-breaking time frame for an introduction of a vaccine, as it usually takes around 10 years to produce a safe and effective vaccine. 

The stock market reacted very quickly to the vaccine news, as US stock futures jumped as soon as investors heard the news. The Dow Jones Industrial futures surged 1,646 points, while other industries’ stocks affected by the pandemic have also pumped in light of hope of future ease of travel restrictions. 

COVID-19 vaccine will not be an “instant stimulus”

Bitcoin saw a negative correlation with the traditional stock market, as it saw a slight plunge towards the mid $14,500 level, as hopes of the old normal economy were to be revived again. While Bitcoin’s sell-off was at the exact time when the stocks were soaring, the BTC plunge could be due to large crypto investors taking their profit out of the safe-haven asset, and back into the stock market. 

Although hopes remain high on the effects of the COVID-19 vaccine on the global economic recovery, an economist warns that this will not result in an “instant stimulus.”

According to Carl Tannenbaum, the chief economist at Northern Trust, the vaccine news and jobs growth in October in the US may seem to have been encouraging, but more economic stimulus is still needed. Tannenbaum explained:

“On the employment front, we still have 10 million Americans that were working in January that are not working today. And those that remain unemployed are seeing a much longer track back to full employment, so they will continue to need a certain amount of support.”

The United States would not be likely to see a new economic relief package before the presidential inauguration in January, said the economist. Recovery still seems to be a steep slope to climb, which could still be bullish for Bitcoin’s outlook. 

What Impact Will The Moderna Vaccine Have on Cryptocurrencies Like Bitcoin in The Long Run?

The COVID-19 vaccine being developed by American biopharmaceutical company Moderna has shown about 94.5% effectiveness in preventing COVID-19 in humans.

According to a report from CNN, the news about the efficacy of Moderna’s vaccine was revealed by the Data Safety and Monitoring Board, an independent panel analyzing Moderna’s clinical trial data.

Following the results of Moderna’s vaccine efficiency, the global stock market has responded with a bullish run. The S&P 500 Index, Dow Jones Industrial Average, and the Nasdaq Composite all saw positive surges. Non-US markets including the FTSE 100 Index also saw positive gains following the clinical data results from Moderna’s clinical trials.

The overall surge in the stock markets has also impacted cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) among others. While these are temporary gains, the presence of a vaccine will also have its long term impact on cryptocurrencies. But how?

Vaccine Presence and Long Term Impact On Crypto

The United States now has two companies with vaccines that have reported more than 90% efficiency in clinical trials to prevent COVID-19. The companies include Pfizer Inc. and Moderna Inc. Both firms are currently seeking Emergency Use Authorization (EUA) from the Food and Drug Administration (FDA), the success of which will see the vaccines being administered in America and subsequently other nations.

The presence of a vaccine may result in lifestyle routines reverting back to normal. Many people who have lost their jobs will likely return back to work as the most impacted industries such as the travel industry will begin to see an uptick in patronage. 

This return to normalcy in the long term will eliminate the need for more stimulus checks, an economic strategy put in place by world governments to support small businesses and those who lost their jobs. As it was generally believed that the printing of more money for use as stimulus packages will cause inflation which is bearish on fiat currencies and bullish on Bitcoin and digital currencies, the absence of stimulus may potentially reverse the trend.

Bitcoin also gained recognition as a good hedge for inflation during the pandemic. With a recovering economy made possible with a vaccine, this favorable tag on Bitcoin may not be as pronounced. In all, some of the factors that have favored and contributed to the institutional adoption of cryptocurrencies and altcoins may be impacted by the emergence of COVID-19 vaccines.

However, if the pandemic has taught investors anything, it would be that it is crucial “to save for a rainy day.” Bitcoin as a hedge has been incredibly effective during the coronavirus pandemic, and that may serve to classify the digital asset alongside gold as a safe-haven asset, once and for all.

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