With coronavirus spreading and threatening further economic fallout, Bitcoin (BTC) and many of the top 100 cryptocurrency prices are plummeting. Dow futures are dropping as well, more than 1,200 points on Monday’s open.
In the past 24 hours, the crypto markets are a sea of red. Bitcoin has fallen more than 10%, sinking below $7,900. Ethereum has fallen more than 13% to $200 while XRP has tumbled to $.20, shedding over 11%. Rounding out the top four cryptocurrencies, Bitcoin Cash is down 17% at $266, according to CoinMarketCap.
The CME FedWatch tracker indicates that traders expect the Federal Reserve to slash interest rates by 75 points. Oil prices have also plunged with Saudi Arabia sparking a price war over the weekend by slashing crude oil prices. The Saudi strategy, reports the Wall Street Journal, is to ramp up production and attack Russia’s market share, pushing prices to $30 a barrel, the lowest level since 1991.
Amidst market turmoil and widespread economic downturn due to the coronavirus outbreak, Goldman Sachs analysts warned on Sunday that crude prices could dip as low as $20 a barrel, “creating acute financial stress and declining production from shale as well as other high-cost producers,” reports MarketWatch.
Says Chris Rupkey, MUFG Union Bank’s chief financial economist,
“They want out. Big time. The sky is falling. Get out, get out while you can. Wall Street’s woes have to eventually hit Main Street’s economy hard.”
As investors exit, fearing that Covid-19 will push the economy into recession, they’re reaching for safer assets, CNBC reports, with gold rising to over $1,700 an ounce, its highest level since December of 2012.
Crypto proponents and detractors alike are offering their take on the downturn. Despite Bitcoin’s performance over the weekend, crypto analyst PlanB, who uses the stock-to-flow (S2F) prediction model to chart the price of BTC, says there’s no sign of weakness in the leading cryptocurrency as the halving event, which will slow its rate of new supply by half, approaches in May.
The analyst adds,
“Bitcoin S2F chart adjusted for today’s ‘crash’ … nothing really happened, btc still spot on S2F track.”
Analyst Peter Schiff says Bitcoin’s double-digit decline is expected.
“There is nothing surprising about this crash to anyone following me on Twitter. I repeatedly warned last week that Bitcoin’s failure to rally on the most ideal financial circumstances meant a crash was coming!”
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