Bitcoin Crashed, Loses All Its 2020 Gains
At the time of writing, the world’s number one cryptocurrency by market cap Bitcoin crashed into the $7,000 range and is now trading at a measly $7,600. All the gains it’s made this year have been erased from the trading board. As fears of the coronavirus turn into a global panic, bitcoin and its altcoin cousins – along with several other market tools, such as oil, bonds, and stocks – are all paying the price.
The currency is now down by nearly $3,000 from its 2020 high and has fallen to where it was at the end of 2019. Despite everything bitcoin has been through over the past three months – despite the geopolitical tensions it endured between the U.S. and Iran – it’s now right back where it started.
Neil Wilson – chief market analyst for Markets.com – explained in an interview:
The blood really is running in the streets. It’s utter carnage out there. Equity markets are hideous today, and these kinds of moves are ones to be afraid of as they can lead to aggressive tightening in credit that can spiral into real financial distress. We don’t even know what kind of impact the coronavirus will have on the economy, yet bond and equity markets are screaming recession.
The fact is, however, that not everyone is worried about the situation. Some – like Jehan Wu, the co-founder of Kenetic Capital – says that the price dip presents an opportunity for lots of people to buy into bitcoin and take advantage of its low price. He comments:
For those who have long term investment horizons, bitcoin is absolutely a buy during these dips. We can expect more of this volatility sparked by macro health and financial shocks, but ultimately long-term investments in the digital future and its key asset bitcoin will be a winning strategy.
The real loser at press time is oil, which has fallen by more than 30 percent. Many are blaming Russia for the tanking prices, which allegedly refused to cut its output of the commodity. Other nations have halted production in response to the coronavirus threats, but Russia is refusing to cooperate.
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Oil Is the Big Stinker, Today
Ipek Ozkardeskaya – senior analyst at Swiss Quote Bank – explains:
Russia punched investors in the face as it refused to follow OPEC with further production curbs to match the slump in oil demand caused by the coronavirus breakout.
The oil drop is the largest in nearly 30 years. Not since 1991 and the days of the Gulf War has oil seen such a dismal performance. Saudi Arabia – one of the globe’s biggest producers of oil – now states that it’s looking to increase its output of oil prices but offer them at heavy discounts to regions of the U.S., Europe, and Asia.