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Crypto Sphere Begins to Feel Ill Effects of Coronavirus Outbreak

Olga Kharif
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Crypto Sphere Begins to Feel Ill Effects of Coronavirus Outbreak

(Bloomberg) -- The coronavirus outbreak in Asia is starting to ripple through the cryptocurrency world in some unanticipated ways -- the cancellation of conferences and even the shuttering of facilities that process transactions.

From the informal MeetUps held during the initial days of Bitcoin to the extravaganzas at the height of the crypto bubble, gatherings have been a key for wooing investors. NiTROn2020 in Seoul, Hong Kong Blockchain Week 2020 and Token2049 have been postponed.

Crypto lending startup DeFiner was reported to have canceled a 10-city tour investor because of the epidemic that has swept through parts of China. Mining pool BTC.top, whose computers help verify transactions, said one of its server farms was shut down by Chinese authorities seeking to prevent the virus from spreading. Equipment makers including MicroBT, a maker of gear used by mining farms, said they are delaying shipments.

“Events like the coronavirus are unfortunately going to be more ‘normal’ than ‘black swan’ over the coming decades,” said Dave Balter, chief executive officer at researcher Flipside Crypto. “The impact on specific industries will be felt, but that will become part of the new normal.”

Whether the virus is affecting coin prices has been debated since the beginning of the outbreak. Advocates say it’s helped raise the haven appeal of cryptocurrencies, while skeptics cite a lack of strong correlations with other asset classes. The Bloomberg Galaxy Crypto Index has jumped 60% since December.

China has been epicenter for the crypto sector almost since the introduction of Bitcoin in 2009. Twenty of the top 50 crypto exchanges are based in the Asia-Pacific region and accounted for about 40% of Bitcoin transactions in the first half of 2019, according to data from Chainalysis. Within the region, the most exchanges are in China, the research firm found.

Five mining entities -- all of them based in China -- control about 50% of all computing power on the Bitcoin network, analysis from TokenAnalyst found.

To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Rita Nazareth

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