As Bitcoin Rallies, One Metal is Falling Hard Amid Coronavirus Fears

The coronavirus has led to fears that economic growth will slow down, especially in China. The country is also the world’s top market of metals like copper. The coronavirus has thus hit the copper industry especially hard and investors are looking for a way out. The effects of the coronavirus are expected to impact China so seriously that many believe the country will be unable to live up to its economic obligations. Phase One of the trade deal with the United States will have to be put on hold. According to the head of the commodity strategy at Saxo Bank A/S, Ole Hansen, “there’s no way China can live up to the agreement of the phase-one deal. So growth is going to be delayed.” [Zacks via Yahoo Finance] China consumes around 50 percent of the world’s copper but, with manufacturing slowing down due to the virus, we could see an economic slowdown. As a result, copper has fallen to September 2019 levels and has seen its longest decline (13 sessions) since 1988. The sell-off has negatively impacted copper-related ETFs, which have been hit especially hard. Both the United States Copper Index Fund and iPath Series B Bloomberg Copper Subindex Total Return ETN are both down about -10 percent. On the flipside, economic fears surrounding the coronavirus have caused hedges against calamity to rise. Bitcoin is one such hedge that has been doing exceptionally well in 2020 and has been posting exceptionally strong numbers are global markets teeter on the edge. Repeatedly, Bitcoin has demonstrated itself as a strong indicator during times of global uneasiness. As BeInCrypto previously reported, it outperformed gold has an indicator in 2019 by demonstrating more price elasticity and being far more responsive to global trends.  As copper ETFs and other precious metals continue to decline, we will inevitably see the rise of alternatives as investors look to park their funds. Bitcoin just may prove to be the most attractive option.