Bitcoin in the Time of Coronavirus
March 9, 2020 saw the worst tumble that the S&P 500 has seen in over a decade, to the point of triggering the “circuit breakers” instituted in 2013 for the first time, and halting trading. At fault is the lightning-fast spread of the coronavirus and the economic monsoon that the virus threatens to herald. With fears of a looming global recession, consumers are flying, driving, and consuming less and factories are shuttering during quarantines, decreasing a demand for oil. Two of the world’s more ornery oil giants, Saudi Arabia and Russia, fell into an unexpected spat when they could not come to an agreement over the quantity of oil to produce and offer on international markets. Without a consensus, Saudi Arabia announced that it would ramp up production, flooding the market with cheap oil and dropping prices over 20 percent in a single day, oil’s sharpest drop since the first Persian Gulf War. Many world currencies are tied to the price of oil, sending them into a tailspin also.
For fans of cryptocurrency, times like these demonstrate the advantage of a de-regulated currency that is not tied to a central bank. When the economies of major nations are in a state of dread and uncertainty, those of smaller, poorer countries are doubly so. This is why especially in markets with unstable local currencies, cryptocurrencies are the far more promising option for investment. However, cryptocurrency itself is only a decade old and known to be volatile. Bitcoin, as the oldest, most well-known cryptocurrency is a bit more of a sure bet. At moments of uncertainty, platforms like Coinmarket truly demonstrate their worth. A free cryptocurrency tracking and portfolio management platform, it offers up-to-the-minute prices for several cryptocurrencies, as well as changes over a 24-hour span, the marketcap, volume of trading in 24 hours, and the supply. Since the situation with the world economy promises to become more, not less combustible in the near future as infections skyrocket, Coinmarket is a site for any cryptocurrency enthusiast to bookmark and check several times daily.
How has the economic panic affected the cryptocurrency and bitcoin market? February 26th, 2020 already ushered in a mass headache with a price plunge that shaved $25 billion off the entire cryptocurrency market. Since then, most digital currency trading patterns have shown triangular consolidation. Though every market has felt the wrath of the world economic downturn, including safe bets such as precious metals, over the last 90 days, BTC is up 18%, and over the last 12 months, up 123%. There has been some selloff on the cryptocurrency market since February 26th, which coronavirus fears may worsen. However, Bitcoin, while not independent of the world, is largely disconnected from Wall Street. It is an unrelated asset and often grows during Wall Street downturns; this turn though may be for the worse. Bitcoin’s price has fallen since Monday morning, but not nearly to the extent of traditional investments and safe bets like gold.
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