Bitcoin suffers price crash as coronavirus fears prompt stock market slump

Will the price of Bitcoin fall to a miserable low or soar to new heights? (Image: PA)

The price of Bitcoin has taken a major tumble and dragged down the value of all the other major cryptocurrencies.

The financial markets have plunged this week as investors panic about the spread of the coronavirus.

Yesterday, the FTSE 100 hit a 12-month low and stocks around the world have been on the slide for five days as investors seek the security of traditional safe havens like gold.

Since Valentine’s Day, the price of Bitcoin has dropped from roughly £8,000 to £7,000 – with all the other important cryptocurrencies including Ethereum and Bitcoin Cash falling too.

Crypto advocates often express hopes that virtual currencies will serve as a ‘hedge’ which allows investors to protect their money if the traditional stock markets start to crumble.

But this assumption is now being challenged because Bitcoin has followed the downward trend of the mainstream markets.

In a tweet, Quantum Economics founder Mati Greenspan said Bitcoin is ‘behaving like a risk asset’ – the name for investments which are likely to fluctuate in price.

This claim challenges many people’s beliefs that financial disaster could end up benefitting the cryptomarkets.

In an interview with the online news channel, Bitcoin investor and entrepreneur Andreas Antonopoulos said an economic collapse would not be good for Bitcoin.

He warned: ‘There’s a tendency among the crypto community to look at [economic crisis] as an opportunity… I think that’s a terrible attitude to have.’

‘I think there’s just as much chance that a slow down in economic activity, especially in the tech sector, will reduce the economic investments in the crypto space as well,’ he added.

Of course, there’s no way of accurately predicting the movements of the crypto markets, so all comments and analysis should be taken with a pinch of salt.


Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.