As global stock markets and economies were ravaged by impact of the coronavirus (COVID-19) outbreak, many believed that cryptocurrencies were going to be the “Hail Mary”, that Bitcoin and other digital currencies would be inversely correlated to stock markets.
But that hasn’t quite been the case. If there isn’t anything this viral outbreak has proven time and again, it’s that no one is immune to it and apparently, nothing is.
Barely hours after the World Health Organisation officially declared COVID-19 as a pandemic, the world’s largest economy, the U.S., announced additional measures to combat the spread of the coronavirus, including travel restrictions from Europe to the U.S.
That announcement has predictably hit Asian and European stock markets which have had a rough trading day following the news. But somewhat surprisingly, crypto markets are having a very, very bad day too. Apparently, nothing is immune to COVID-19, not even crypto.
Bitcoin crashed to as low as USD 5,965.00 at one point today and is currently trading around the low end of USD 6,000.00.
In what has been a rocky start to 2020, Bitcoin has been steadily going down for the past month. As of February 19, you could still receive over USD 10,000.00 by selling 1 BTC. But as of now, you’ll be lucky to get half that amount.
Explaining the sharp decline in the price of cryptocurrencies (which had many had thought would be immune to the fallout of the viral outbreak), Marcus Swanepoel, CEO of Luno, a cryptocurrency exchange who reached out to WeeTracker via email said the U.S. announcement was the trigger.
“The announcement that the US is banning all travel from Europe has led to losses across all the main altcoins, as the full impact of the coronavirus becomes clear. This morning Bitcoin is below USD 7,500.00 as any positive sentiment was left on the runway,” he commented.
“Ethereum is down to USD179.00, and XRP has crashed below USD 0.20 to trade at USD 0.91 as the impact on cross-border trade becomes clear. Bitcoin Cash is at USD 245.00, a coin that was looking to break above USD 500.00 a few weeks ago.”
Swanepoel, added, “There is no surprise that as coronavirus has been classified as a global pandemic, and for the first time, the US has acknowledged the seriousness of the situation, that all markets are coming under pressure. We do still believe that cryptocurrencies will find buyers coming back in for them as investors will want to be in assets which are uncorrelated to the main markets.”
Since 31 December 2019 and as of 12 March 2020, 125,518 cases of COVID-19 (in accordance with the applied case definitions in the affected countries) have been reported in 125 countries, including 4,617 deaths.
Global economies have suffered, major global events have been suspended, travel is being restricted and entire cities are on lockdown.