The U.S. President Donald Trump announced on Saturday, March 21st, new measures and initiatives that would help the United States fight the Coronavirus outbreak that is affecting the entire world. Now, cryptocurrency investors are waiting for the reaction of the market before taking a clear decision on whether to enter or exit their crypto positions.
Bitcoin and Crypto Investors Waiting For Market Reaction
During the last weeks, Bitcoin (BTC) and other virtual currencies have been closely related to how traditional financial markets were operating. Indeed, when stock markets fell, Bitcoin and digital assets followed. This pushed the entire crypto market to the lowest point in months, and many investors were not expecting such a reaction from digital assets.
Indeed, Bitcoin was created in the middle of the last financial crisis, and this is the first time that the most popular cryptocurrency is experiencing such a situation. Bitcoin was considered to be a store of value for difficult economic periods, nonetheless, Bitcoin proved it was not able to keep its value after falling from $10,500 in February to under $3,900 a few weeks ago.
This massive price fall took place when traditional markets tanked. Now, a Bank of America economist considers that there is no limit for governments on stimulus spending. In order to deal with the current sudden-stop of the economy, governments are planning massive stimulus packages.
In a recent statement released by Michelle Meyer, a recognized analyst of the Bank of America considers that the stimulus packages may be massive. On the matter, Mr. Meyer commented:
“When it comes to the policy response, there should be no upper bound for the size of stimulus, in our view.”
In the last three months, Bitcoin has registered a positive correlation with the S&P 500. This is why we mentioned before that investors are now waiting for markets to open and see the effect of the new measures announced and yet to be announced by the United States government.
Although Friday closed positively for markets, it will be certainly important to wait until the next days in order to see which is going to be the effect on the crypto market.
At the time of writing this article, Bitcoin is being traded around $6,260 and it has a market capitalization of almost $115 billion, according to data provided by CoinMarketCap. Other digital assets are operating stably.