New Covid Boosters Expected by Mid-September, But Impact on Bitcoin Unclear

The Centers for Disease Control and Prevention (CDC) has indicated that updated Covid-19 booster shots from Pfizer, Moderna, and Novavax will likely be available to the public by mid-September. This updated vaccine rollout aims to combat emerging omicron variants ahead of an expected fall surge, but the implications for Bitcoin and crypto remain uncertain.

In recent pandemic years, Bitcoin has shown some correlation to Covid cases and vaccine news. However, this relationship has weakened and appears more nuanced. As the world moves toward an endemic phase, it's unclear if the forthcoming boosters will significantly sway crypto markets.

Timeline and Target Strains

Per CDC guidance, the reformulated shots are designed to target the omicron offshoot XBB.1.5. This fast-spreading subvariant now accounts for over 28% of U.S. cases.

The boosters have shown strong efficacy against XBB.1.5 in trials thus far. But they also appear effective against EG.5, another rising omicron mutation fuelling the current mini-wave.

Before public rollout, the updated vaccines need approval from the Food and Drug Administration (FDA) and final CDC recommendations expected by September 12. This puts the updated shots on pace for availability around mid-month.

Contrast With Early Vaccine Rollouts

The original Covid vaccines in late 2020 and much of 2021 proved to be significant catalysts for Bitcoin price spikes. The crypto asset surged as inoculation fueled economic reopening and recovery hopes.

However, the landscape today is far different. Vaccines are no longer novel, and distribution logistics are well-established. Markets are unlikely to be caught off-guard or exuberantly react to the September boosters.

Waning Influence on Crypto Markets

Additionally, the correlation between Bitcoin and pandemic trends has clearly weakened. Major crypto selloffs in 2022 occurred even with cases and hospitalizations declining. Bitcoin increasingly charts its own course based on internal dynamics like mining economics.

This muted interplay suggests the upcoming booster rollout may only have a marginal impact on crypto prices. Some residual trading around vaccine headlines is possible, but nothing resembling early 2021.

Lingering Macroeconomic Headwinds

Of course, the broader economic implications of a fall Covid wave still warrant monitoring. Additional disruption to supply chains, labor force participation, and energy costs would perpetuate inflation - a key drag on risk assets like crypto.

In this respect, effective boosters may aid Bitcoin by hindering a winter viral resurgence. But any gains from stabilizing the economy could be offset by continued Federal Reserve rate hikes.

Caution on Growth Assets Persists

Markets remain poised for volatility as central banks continue tightening policies. Bitcoin and stocks face persistent sell pressure as quantitative tightening drains liquidity.

These entrenched bearish macro factors seem far more likely to dominate crypto price action rather than the incremental impact of a seasonal booster campaign.

Conclusion: Muted Response Expected

In summary, the arrival of updated Covid shots will unlikely provide major positive or negative impetus for Bitcoin and the crypto market. While important for public health, the boosters lack the surprise and novelty of first-generation vaccines.

Ongoing Fed rate hikes and quantitative tightening also present a considerable countervailing force. Bitcoin will continue tracing its own path based on adoption and network fundamentals. The macroeconomic headwinds require time to abate.

How could emerging Covid variants impact Bitcoin markets this winter?

While the influence has diminished, Covid resurgences remain a potential source of volatility for Bitcoin based on associated economic effects:

  • New variants interrupting supply chains could prolong inflation and complicate central bank policy. This may pressure risk assets.
  • Renewed workforce and mobility restrictions could slow growth. Lower output and earnings would undermine fragile recovery hopes.
  • A fresh strain overwhelming healthcare capacity risks local lockdowns and mobility limits. This may dent consumer spending and business activity.
  • Additional fiscal and monetary stimulus programs would provide some counterweight. But diminished ability for governments to run huge deficits could mute impact.
  • General fear and uncertainty tends to boost haven assets like gold and bonds. Bitcoin may also benefit from safe haven flows depending on market structure.

However, potential upsides exist if the virus wave proves manageable:

  • Effective vaccines and improved treatments could limit severity and restrictions. A mild flu-like winter would allow continued economic reopening.
  • Many sectors have adjusted operations to maintain productivity amid outbreaks. This resilience limits downside risk.
  • Endemic-phase living with Covid appears priced into markets. Absent large surprises, muted reactions are likely.

What key metrics indicate growing mainstream Bitcoin adoption?

Several key metrics highlight Bitcoin's expanding mainstream adoption:

  • Number of active blockchain wallet addresses continues reaching new highs, indicating broader retail and institutional participation.
  • Trading volumes on regulated exchanges like Coinbase and FTX reflect surging investment inflows to crypto markets.
  • Custody assets under management at services like Coinbase and Anchorage have steadily risen as major funds and banks enter.
  • Hashrate mining power hitting consecutive all-time highs shows rising security infrastructure investment and participation.
  • The number of distinct BTC addresses holding at least 0.01 coins grew by over 15% in 2022, showing widening ownership.
  • Greater choice of SEC-approved Bitcoin ETFs and derivatives reflect maturation of investment vehicles.
  • Rising payroll allocations to Bitcoin by major corporations demonstrates growing legitimacy.
  • Improved Bitcoin awareness and favorability across consumer surveys, especially among younger demographics.
  • Proliferation of digital asset lending, staking, and savings accounts at banks mirror traditional services.
  • Growing vendor adoption for direct Bitcoin payments, led by leaders like Microsoft, AT&T and AMC Theaters.

Subscribe to BTC Peers

Don’t miss out on the latest issues. Sign up now to get access to the library of members-only issues.