Various economies all over the world suffered significant blows because of the NCoV-19 or the Novel Corona Virus outbreak. People are wondering about how the cryptocurrency market and other assets will fare during this pandemic. If you’ve been following the news, you can see the fluctuation while the market adjusts to the abrupt changes. You can expect values to stabilize after countries lift their lockdowns and quarantines.
There are different kinds of markets affected by the global outbreak, and here are some of them:
Last March 12, 2020, Bitcoin experienced turmoil due to low market value at $5,678, with severe sell-off seen in traditional markets. As seen in CoinDesk’s Bitcoin Price Index, it represents about a 25 percent drop in 24 hours. BTC Trading Inc Review and Bitcoin experts call such event as Black Swan due to the novel coronavirus that is now pandemic.
The low market value of Bitcoin quickly rebounded to more than $6,550. France’s CAC, Germany’s DAX, and U.K.’s FTSE 100 are all down at six percent, and Japan’s Nikkei index is losing 4.5 percent. The risk aversion worsened by the announcement of President Donald Trump on a 30-day travel ban from most of Europe, which failed to meet the expectations of investors for fiscal stimulus measures to combat the coronavirus epidemic.
Michael Novogratz, CEO of Galaxy Digital, tweeted about the explanation for the 13 percent slide of Bitcoin’s in late February wherein the S&P 500 suffered a drastic drop in the same week. Because of the decrease in outstanding future contacts and global open interest, it signals a sluggish institutional activity. You can expect similar trends in the coming months while institutions are experiencing rapid fluctuations.
Gold and Liquid Assets
Gold, on the other hand, is considered a classic haven asset that is struggling to maintain gains with yellow metal currently trading primarily at $1,642 per ounce, which was $1,630 earlier. For most traditional safe havens, they are struggling because the financial institutions are liquidating asset positions to fund margin calls or the value of the leveraged account of an investor dropping below the least margin requirement, which explains the current flow and movement of prices.
There is an intense hunger for liquidity in which a model portfolio of half of stocks and treasuries fell by the most on record. Market liquidity freezes everything, and people are in excellent trade struggle. It’s observed that there’s a flip of “buy the dip mentality,” as financial experts say, including the BTC Trading Inc Review. If you’re holding liquid assets, then expect the value to rise in the coming months after the recovery period.
It seems that institutional investors take a break from Bitcoin during this unstable period because of the growing fear of the pandemic coronavirus. In BTC Trading Inc Review, it says that stocks will lose altitude and keep the Bitcoin under pressure if coronavirus doesn’t disappear in the months to come. When companies and economies recover, the values will become easier to predict.