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Bitcoin Fails as Coronavirus Fear causes Massive Sell-Off

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Luis Monzon
Luis Monzon
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Having been previously believed to be a safe-haven asset, Bitcoin took a big slump this week amid a massive craze of equity-market selling, reports My Broadband. Having fallen as much as 3.4% on Tuesday to trade at around $9320 as of 3:19 pm. Similar cryptocurrencies and peer coins such as Dash, Litecoin and Ether each lost more than 4%.

Week-long headlines proclaiming the coronavirus’ negative impact on global market growth have sent the S&P 500, which tracks the performance of the top 500 companies, spiralling into the abyss with an equity index drop of more than 6% this week.

Likewise, the JSE has had a terrible week, with the coronavirus as well as South African frustrations and doubts scaring investors causing its 15th biggest loss in the past twenty years.

Meanwhile, undergoing a two-day decline, Bitcoin has dropped to 3.5%. The stock had seemingly seen growth from the onset of the coronavirus at the beginning of the year, reaching its highest value since 2012. However, it too seems to have largely dropped in value from the beginning of the month.

“Bitcoin just picks the status as an alternative asset when other things look crowded,” said Mark McCormick, global head of currency strategy at TD Securities. He continued that “It’s hard to argue that it has even reached ‘store of value’ status.”

Store of value stocks where investors store their money for protection and later use are usually things such as bonds and gold, which are seen as traditional refuges against a tempestuous market. Gold rallied over the week as investors sought to protect their wealth. This saw the precious metal hit its highest since 2013.

A few technical gauges are seeing a further downfall in the cryptocurrency. GTI Vera Band Indicator, which tracks trends in stocks both upwards and downwards shows that Bitcoin is very close to another downtrend, about 1.5% away from it.

Edited by Luis Monzon

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