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Bitcoin on Defensive Again, Moderna CEO Warns of Reduced Vaccine Efficacy and Exchange Inflows Are Expected

Bitcoin

Bitcoin is on the defensive again, as the CEO of Moderna warns of reduced vaccine efficacy and exchange inflows are expected.

Current vaccines will most likely be ineffective against the new type of the virus, according to the CEO of a pharma company, Moderna.

On Tuesday, the financial market mood shifted again to risk-off after the CEO of pharmacy Moderna cautioned of a significant decline in vaccine efficacy against the newly discovered CoronaVirus variant Omicron.

Bitcoin dropped 2.5 percent, reaching under $56,000, while S&P 500 futures fell 1.2 percent. As government bonds drew safe-haven demand, the Australian dollar-US dollar (AUD/USD) exchange rate fell to a 12-month low of 0.7092, and the yield on the US 10-year Treasury note pierced Friday’s low of 1.47 percent.

Moderna’s CEO, Stéphane Bancel, said to the Financial Times that current vaccines will likely be ineffective against the new variant of Covid. Pharmaceutical companies could take months to manufacture vaccines at scale to combat the Omicron variant, according to Bancel.

Bancel’s remarks rekindled fears about the pandemic’s direction, potentially jeopardizing risk asset recovery. After news that Omicron patients in South Africa had extremely minimal symptoms, a buoyant atmosphere went back to crypto and financial markets on Monday. Furthermore, the United States President Joe Biden stated that the new variety is a “cause for concern” but “not a cause for panic,” ruling out costly lockdown measures. On Friday, Bitcoin fell nearly 9% to $53,600 after the World Health Organization (WHO) classified Omicron as a variety of concerns.

Market participants agree that if the situation worsens, policymakers will give infinite support to asset prices, leading to lockdowns. Governments and central banks, on the other hand, would be put in a difficult position. Lockdowns and further stimulus, with global inflation already higher than expected, might lead to stagflation, a period of low growth, and high price pressures. While Bitcoin (BTC) is often classified as a store of value, it is nonetheless susceptible to market volatility in growth-sensitive assets such as equities.

Many cryptocurrency investors appear to be concerned about the possibility of a prolonged price collapse, and they appear to be shifting coins to exchanges. Glassnode data shows that centralized exchanges have received over 24,950 BTC in the last four days, as seen by an increase in the number of coins stored in exchange addresses. When investors want to sell their coins, they usually shift them to exchanges.

While the recent hike in exchange balances is hardly significant, a continuing rise could indicate a bigger decline. After the number of exchange balances broke the year-long slump in May, bitcoin plunged significantly.

The Author

Samuel Adeshina

Samuel is a financial reporter whose interests include blockchain, market, business, insurance, and Crypto to provide relevant information to all interested.