The emergence of the coronavirus pandemic has caused an unprecedented recession in the cryptocurrency market with major digital assets breaking multiple-year-old support in just a few days. This article aims to identify some of the assets that were massively hit by the pandemic.
Bitcoin could not escape from the massive impact of the coronavirus as its value amassed over the year fell by half in just 24 hours. Over the month, the price of the digital asset fell below $4000 in just a short while since March 2019. Interestingly, Bitcoin was trading at $10,444 on 13 February 2020, but its value has since then fallen with increasing recorded cases of the coronavirus. The reason for this can be linked to the strict measures put in place to ensure that people stay at home for the time being. In this case, the need to buy food and other stuff in this emergency situation forces investors to convert Bitcoin to cash. Due to this, investment has become least important causing a high sell-off in the Bitcoin market. The Bitcoin price is on the verge of bouncing back as it has recorded a positive rise in price in the last 24 hours, trading at $5947 as at 22 March 2020, around 7:50 GMT.
XRP is one of the many other cryptocurrencies Impacted the most by the effect of the coronavirus pandemic. Around 15 February 2020, XRP was trading at $0.33. However, the value decreased more than half after the coronavirus went global. The value of the digital asset reduced by over 50% to as low as $0.13. XRP reduced in value by over 39% between 7 March to 13 March, and this was the worst fall since November 2019. The XRP price has shown a signal of recovery as its value has currently risen a little over $0.15.
It is seen that the current struggle of the XRP price is an opportunity to enter the market. However, the uncertainties surrounding when the coronavirus pandemic will slow down have made investors hesitant to make a move. The reason for the fall is not much different from that of the Bitcoin struggle. Nevertheless, according to the latest TradingBeasts XRP Price Predictions, the coin should recover from its steep drop and by the end of second quarter the price should hover an average around the $0.2 mark.
Ethereum was massively hit by the coronavirus pandemic just like Bitcoin and XRP. From its price history, the digital asset has reduced in value by over 50% since its previous high of $281 on 14 February 2020 to trade around $125 as of 22 March 2020. The reason for the fall has been linked to the activities of the whales who account for about 30% of Ethereum in circulation. It is suggested that the coronavirus has caused a panic sell, forcing the whales who were expected to hold onto their investment for a little longer to dump their assets.
Ethereum was seen to be a safe haven behind Bitcoin. However, recent activities in the market have proven otherwise. Their value is influenced by the emotions and the fear of investors who are quick to convert their assets into fiat in the face of any unfortunate global event. Though Coronavirus is the key reason for the general fall in the price of cryptocurrencies, the dramatic bear-run coincides with the plunge of the oil price. This was due to the failure of Saudi Arabia and Russia to reach an agreement in limiting the production of crude oil. Considering the fact that the affected countries are key users of cryptocurrencies, it is understood that this has hurt the price.
Another reason suspected to have caused the high drop in cryptocurrency prices beside the coronavirus is the incident of a Ponzi-scheme run by the PlusToken. It is said that the company has managed to run away with over $2 billion from victims residing in China and South Korea. These countries are the key players of cryptocurrency and have the ability to affect the price. It is suspected that the movement of Bitcoin worth $2 billion might have sent the price down the price curve, dragging down the altcoins as well.
Life after Coronavirus
Market pullbacks like this are very familiar and common in the market. The Bitcoin price and that of the altcoins affected by the pandemic will certainly bounce back as investors may buy back the sold assets.