The cryptocurrency market has taken a hit the past weekend after most digital assets have lost their value. The decline was followed by a fall in stock prices as well as oil prices, with ‘ liquid gold ‘ falling to one of its lowest points since 1991.
Bitcoin, which was usually considered a safe haven for investors has also crashed alongside its mainstream compatriots. While the world’s largest cryptocurrency, stocks, and oil have fallen, gold has increased in value to become the only stable asset.
What surprised investors the most was the fact that Bitcoin acted the same way as traditional assets. Bitcoin usually behaved conversely to that of the S&P 500 and the NASDAQ, prompting many to believe that the cryptocurrency would always remain a stable source of value. This was proved wrong when over the last weekend, Bitcoin fell below the $8000 mark while the S&P 500 fell by 4 percent while oil fell by more than 20 percent.
Bitcoin had fallen more than 8 percent over the weekend and had broken the immediate support to trade in the $7000-$8000 range. At the time of writing, Bitcoin was trading for $7,910.82 with a total market cap of $144.47 billion. The world’s largest cryptocurrency had fallen more than 12 percent over the past seven days and that had brought the weekly value drop to 12.07 percent.
Generally, Bitcoin was compared with all the traditional stocks but some analysts expected altcoins such as Ethereum and XRP to also prosper. Alas, the largest altcoin in the market could only manage the value of $199.78 while the market cap just broke the $21 billion mark. Ethereum’s weekly drop was recorded to be 10.44 percent while the market volume broke the $25 billion mark.
The price of gold nearly crossed the $1700 market on Monday before correcting itself to lower values. This was the first time in a long time that gold was faring better than its compatriots who were down by the trenches. The VanEck Vectors Gold Miners ETF fell by 14.5 percent over the last week. This was worse than the 11.5 percent drop within the S&P 500 market. Companies such as Newmont [NEM], Franco-Nevada [FNV[ and Barrick Gold [GOLD] all tanked over the course of the past seven days.
Although gold was faring better than most of the other assets, it still did not mean that the economy was not collapsing. Gold fails to become a safe haven when the economic and financial rates were crumbling faster than the interest rates were falling. Investors were still waiting to see if the return on gold would be as massive as it is expected to be with Bitcoin and other major cryptocurrencies.
Along with traditional stocks, American citizens also kept an eye on Treasury’s These decade-oldBitci treasury futures were up by more than 1.3 percent during the week which was a sharp drop compared to Friday’s 0.76 percent. A majority of the people were worried about the drop in oil prices, a radical impact of the Coronavirus. International agencies even predict a contraction for the first time since 2009. Mikhail Leontiev, a spokesperson for Russian state oil company Rosneft stated:
“By yielding our own markets, we remove cheap Arab and Russian oil to clear a place for expensive US shale oil and ensure the effectiveness of its production.”
Countries were waiting and watching for the impact that the prices will have in the future. At the moment, it looks like a reprieve will only be brought about by curbing the spread of Coronavirus.