The World Health Organization (WHO) officially classified Coronavirus as a pandemic. Outbreaks in Italy, Korea, and Iran appear to be spreading rapidly, with more than 60 countries having been directly affected and cases being reported in New York City and many other key cities around the world.

The disease has also been seen affecting the world economy along with global health. The traders are facing Coronavirus induced volatility in the market. Many are stunned by the fear of the world economy to slow down, which is, therefore, affecting the stock prices to dip down. Reports suggest that the S&P 500 index has gone red with 10% since January 2020.

Before Black Monday, when the price of Bitcoin dipped below $4,000, indicating that cryptocurrencies are not immune to the influence — and downturns — of traditional financial markets, the trading volume of Bitcoin spiked. Many other major crypto exchanges also reported the same uptick movement in the trade volume in the past weeks. The cryptocurrency market managed to recover from Black Monday's slump. All major coins are in a green zone, however, the further upside seems to be contained for now.

The problem is that there's no single reason why investors choose to own cryptocurrencies. Some see cryptocurrencies as an alternative to fiat currencies, but others simply speculate that they can buy cryptocurrencies low and sell it high, with the main purpose of increasing the value of their portfolios. As long as speculators are majorly involved in the cryptocurrency market, investors can expect to continue seeing violent price swings -- even for reasons that don't seem to make sense.

Cryptocurrencies have seen a sizable decline in the face of falling mainstream financial markets. A connection arguably exists between declining traditional market prices and the coronavirus. Considering current events, it is unclear whether cryptocurrency markets and cryptocurrency market as a whole will be negatively impacted by this news, or provide safety from the storm. Falling traditional markets also may have affected crypto prices as investors flock to more stable assets. This means if cryptocurrency can separate itself from this whole situation, it has potential to become a global hedge option for everyone facing financial crisis around the world.

In current situation the most valuable benefit is that cryptocurrencies are famous for their digital method of value transfer, do not necessitate the handling of fiat cash — paper government debt notes that often carry germs from one person to the next. It is absolutely clear that the digital nature of the industry means that the blockchain space is not an inherent breeding ground for viruses.

Moreover, many projects within the industry function remotely or with remote potential. This way allows workers to avoid the spread of germs. This allows many Blockchain companies to continue contributing to the economy in a way that workers in other sectors cannot.

Despite Coronavirus seemingly little physical effect on the sector, recently New York’s Department of Financial Services (NYDFS) required the state’s sanctioned cryptocurrency firms to provide detailed coronavirus preparedness plans. Plan must include employee protection strategies, increased cyber-risk mitigation, disaster communication plans and procedures to ensure the continued functioning of critical operations “at a minimum.” Cryptocurrency firms also have to lay out their point-by-point plans for the eventuality of a potentially snowballing outbreak. Also, concern over the possibility hackers might try exploiting the virus outbreak, and to consider implementing more robust security measures that could detect “fraudulent trading or withdrawal behavior.” Such requirements from NYDFS could be just an example how to proceed in current situation, so requirements may also be applicable in other jurisdictions.

In conclusion, despite the fact that industry physically appears to be remotely organized and controlled, effects of Coronavirus emerges in cryptocurrencies market, which is proved by precautionary measures by New York’s regulator. The same applies to the market itself – despite the huge spike in price before Black Monday, assets might not escape value decline, due to the failing of mainstream financial markets.

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