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Star Media STARMEDIA (ID: Star_Media1)

, Author: Xiu MU, reprinted by Odaily with authorization.

Jason Wu, founder and CEO of non-regulated crypto lender DeFiner, said he canceled 12 meetings with Chinese crypto clients due to the virus outbreak, Coindesk reported. "We planned to go to 10 cities to talk to potential clients in China. But because of the virus, no one wanted to attend any meetings, we had to reschedule everything," Wu said.

Given its centrality to crypto investments, China has the most exchanges in the Asia-Pacific region, which accounts for 40 percent of the top 50 global exchanges, according to research firm Chainalysis.

Wu said marketing activities are crucial for China-based cryptocurrency investment firms to raise funds and invest in digital assets, which could be slowed down due to the virus outbreak. “If funds don’t flow into these crypto assets as usual, the market could be hit hard,” Wu said.

Wu also said that in addition to the virus outbreak, the cryptocurrency market could be hit with a double whammy as the Chinese New Year approaches. Many Chinese cryptocurrency investors tend to sell cryptocurrencies to cash out before the holidays and invest in the market after the year.

Lingxiao Yang, chief technology officer at San Francisco-based crypto hedge fund Trading Terminal, said that while Chinese cryptocurrency investors have considerable market power, it is statistically difficult to find a correlation between virus outbreaks and cryptocurrency market movements. “Given that the data is not always available and transparent, it is difficult to find out what affects the trading volume and market price of cryptocurrencies,” Yang said.

Additionally, the overall market capitalization of cryptocurrencies is small compared to the stock market, which means that many factors can have an impact on the market. Still, Yang described some characteristics of Asian cryptocurrency investors that could make the coronavirus an important factor affecting the market.

Most cryptocurrency investors from Asia tend to be individual investors, who historically become more active around major holidays such as the Chinese New Year, he said. He mentioned, “We cannot predict market prices, but based on our past experience, market prices tend to be more volatile during this period. The outbreak of the virus may cause individual investors to conduct more crypto transactions because these Investors will have to stay at home and they will have even more time to focus on the market."

Kostya Etus, senior portfolio manager at money management firm CLS Investments, said that due to the unique return dynamics of digital assets like bitcoin, it is difficult to predict market prices.

Etus said, “Bitcoin is not really considered a safe-haven asset like gold or cash, and it doesn’t have much in common with risky assets such as stocks. Although most assets are specific to a certain risk-bearing environment Yes, you can predict the price reaction to certain events, but Bitcoin is not such an asset.”