Cryptocurrencies and Bitcoin (BTC) are behaving as risk assets after a massive sell-off that affected the whole industry and financial markets. While Bitcoin plunged to almost $5,000 in the last 24 hours, other altcoins followed and the entire financial market experienced one of its worst days in history.
Bitcoin and Financial Markets Affected by Coronavirus
A virus that started spreading in China is creating one of the worst crisis in history for financial markets and different asset classes. The entire cryptocurrency market plummetted in the last few hours after Trump’s speech and the announcement of the European Central Bank (ECB) on how to deal with the current crisis.
Coronavirus started spreading all over the world and it affected several countries including Iran, Italy, the United States, Germany, France and Spain, among others. Italy had to lock down the entire country, while other nations are planning to follow similar steps. The negative effects over the economy could be certainly be underestimated with firms already halting production and many others laying off employees.
Global stock markets fell massively. In Italy, for example, in Italy, it fell by 16.6%, in Brazil 14.7%, very similar to what happened in Spain where the stock market plummetted 14.6%. The same happened in Germany, France, the United Kingdom and the United States with the DOW. In these countries, the markets registered losses of -12%, -12%, -10.9% and -10%, respectively.
Christine Lagarde, the president of the European Central Bank informed that they will be delivering a new package of support for businesses, banks and also households in the current market situation. However, the market was expecting much more things from the ECB, to mitigate the effects of the Covid-19 in the economy and the countries of the Eurozone.
Now, Bitcoin was able to recover part of the price that it lost in the last few days and it continues to be traded in tandem with traditional markets around the world. After reaching a low of $3,800 in some exchanges in the European night, Bitcoin moved to over $5,550 with a market cap of over $101 billion.
Other cryptocurrencies such as XRP, Ethereum (ETH) or Bitcoin SV (BSV) were severely affected by the current bear trend and reached new lows not seen in several months. Now that financial markets are operating positively, things could get better for the crypto market.
Nonetheless, it will be certainly important to understand how the Coronavirus will keep expanding and how it will affect the entire economy.