Backed by coronavirus-related concerns, trillions of dollars have been washed out of global Crypto markets and equity markets, with it now spreading across mainland Europe. The entire cryptocurrency market cap has declined by $40 billion in response to the recent sell-off that saw Bitcoin plunge from $10,500 to around $8,600. While the cryptocurrencies price crash has been devastating, it pales into insignificance in comparison with the stock market downturn.
Ether (ETH-USD) is down 11 percent in the last five days, ripple (XRP-USD) is down 12.5 percent, and bitcoin cash (BCH-USD) is down 16 percent, among the three largest market-cap coins after Bitcoin. One possible reason could be, members at Chinese crypto mining companies have been forced to remain at home or stranded outside of towns as quarantines are being implemented there by affecting global crypto markets.
Many cryptocurrency analysts have puzzled their minds asking why Bitcoin struggled to give higher yields while assets like gold are still impressive. Forbes mentioned that, even though Bitcoin has some features that compare favorably with gold, it remains far too volatile for many people with low risk tolerances who seek to protect their wealth above all else.
According to Yahoo, Mati Greenspan of Quantum Economics theorized this week that bitcoin was never “a safe haven against declining profits”. The main market concern right now as big companies issue warnings about coronavirus undermining their earnings projections; then, Greenspan mentions, bitcoin is a safe haven “from inflation, geopolitical instability and central banks.”
One reasonable understanding is that Bitcoin remains at moments, a safe place or safety bet, but a global crisis such as coronavirus is too difficult to overcome or you could conclude that Bitcoin remains entirely causally related to mainstream markets.