The spread of the infamous Coronavirus has sent the entire planet reeling with new cases being reported on a daily basis. The virus first spread from the Chinese province of Wuhan to multiple countries worldwide.
As doctors and organizations are trying to find a cure for this deadly virus, trade markets have also taken a plunge.
The Coronavirus has now killed atleast 81 people in China and has infected more than 2500. The largest scale spread of the disease has also led to some parts of China being cordoned off. Global stocks have been falling sharply since the spread of this disease and analysts are concerned that multiple sectors may start to fall soon.
On January 27, European stocks were on track for their worst day since early October 2019. The stocks that were hit included companies in several sectors such as luxury, travel, and mining. Brent crude oil fell by more than 3 percent and closed below $60 for the first time this year.
While mainstream stocks were tumbling, digital assets such as Bitcoin and Ethereum were rising up the charts. The world’s largest cryptocurrency had also broken the $9000 barrier on January 27. At the time of writing, Bitcoin was trading for $8972 with a total market cap of $163.173 billion. The four percent growth, contrary to that of crude oil’s had elevated the 24-hour market volume to $31.531 billion.
In the fiat world, China was bracing itself for a blow to its Q1 growth. Due to the Coronavirus outbreak, the country’s consumption, travel, and manufacturing industries have taken a massive hit.
Trade was also affected when all Chinese New Year celebrations were put on hold because of the virus. The offshore exchange rate for the Chinese renminbi fell by one percent with downturn sentiments from all across Europe. JP Morgan even released a circular addressing the issue. It said:
“The outbreak of the coronavirus could drive large swings in the mainland China/emerging markets Asia growth profile in the first half [of this year] but a much smaller impact on full-year growth, if the Sars episode is any guide.”
The shares of companies based out of the United States had also dipped sharply on Wall Street. Cumulatively, the S&P market fell by 1.5 percent. The expectations for market volatility is now the highest in 3 months, citing issues related to large scale fiat currency printing.
Cryptocurrencies, on the other hand, have remained strong in the face of adversity. Bitcoin and its compatriots have only risen in value, lending more weight to the argument that crypto can solve financial problems during a crisis.