Bitcoin is trading at $6,746, up 7.6% in the past 24 hours, rising 9% at the start of the second quarter. While the stock market continues to struggle, reeling from the Dow’s historic 23% decline, the S&P 500’s 20% plunge and the Nasdaq’s 14% dip in the first quarter, Bitcoin posted a 10% drop over the first three months of 2020.
While performing notably better than equities, Bitcoin failed to live up to expectations that the leading cryptocurrency is a clear safe haven asset. Instead, the market turbulence due to the pandemic was widespread. Gold, however, maintained a significant edge, up nearly 4% in the first quarter as investors looked for traditional safe-haven assets.
Analysts expect the coronavirus outbreak to inflict a long-lasting blow to the US economy, which is already threatening to post its highest unemployment figures since the Great Depression. Nearly 10 million American workers have filed for first-time unemployment benefits in a two-week span.
Economists at the Federal Reserve Bank of St. Louis project an unemployment rate of 32%, with the loss of 47 million jobs, along with 67 million Americans who are currently at high risk for layoffs, reports CNBC.
In a research report posted last week, St. Louis Fed economist Miguel Faria-e-Castro writes,
“Moreover, one can argue that the expected duration of unemployment matters more than the unemployment rate itself, especially if the recovery is quick (and so duration is short). These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years.”
Governments in uncharted territory have been taking extreme measures to combat Covid-19, restricting movements, issuing lockdowns and pledging stimulus packages that are designed to keep corporations, small businesses and individuals afloat.
David Wessel, director of the Hutchins Center on Fiscal & Monetary Policy at the Brookings Institution, tells CNN,
“I have no doubt the recession will be shorter and shallower and the recovery stronger than they would have been without these measures. But we’re still going to have a deep recession, and a lot of people will get hurt economically. And unless all the virus disappears with unanticipated speed, Congress probably will need to do more.”
Johns Hopkins reports that the number of confirmed cases worldwide has just crossed one million, with 236,339 cases reported in the US.
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