If there’s one thing that global news is excellent at doing, it is impacting financial markets, especially volatile ones like the cryptocurrency market. One such developing story that has potentially had such an effect is that surrounding the rapidly spreading Coronavirus, which has seemed to have impacted both the stock market and the cryptocurrency market (with the former feeling the bulk of the effects).
The biggest questions for traders when events like these occur are, is this truly an issue and, if so, what are the potential implications of this development? If you are worried about your investments during this time, let’s take a look at a few of the arguments from both sides to determine what may be taking place.
Coronavirus As a Threat: The Stock Market and The Crypto Market
If you have been paying attention to traditional financial markets, you may have seen the massive dip that was recently attributed to the Coronavirus outbreak as individuals raced to sell stocks. The cryptocurrency market seemed to take a similar route as traditional markets plunged, with the price of Bitcoin and other digital assets experiencing heavy losses.
While the traditional market has since rebounded some at the time of writing, which is most likely due to the fact that hopes have risen in regards to the impact of the Coronavirus, the crypto market hasn’t seemed to bounce back from its drop. Some worry that this may be due to the fact that investors are looking to put their money into volatile markets only if it is necessary.
Of course, analysts are also taking into consideration the fact that the Coronavirus has such a massive impact on China, where are a number of cryptocurrency businesses and individuals interested in cryptocurrency lie. Some worry that it is this market that is being toppled by the illness, which may have a ripple effect on the rest of the industry on a global scale.
Overall, confidence is not too high for those who sit on this side of the argument.
Coronavirus As a Factor of Panic
For those who are not as concerned about the market dip, they believe that cryptocurrency is simply mimicking the progress of traditional markets and that the dip is not necessarily directly tied to the Coronavirus. Additionally, some believe that because cryptocurrency is such an unpredictable force, the market may instead rise despite the news as it may not be able to bring down the market, no matter how much panic there may be.
There is also hope that certain upcoming events, like Bitcoin halving or the potential for some to use Bitcoin as a haven asset, will boost the price despite its current slump.
Because the Coronavirus is still relatively new, it is too soon to determine exactly how it will impact the cryptocurrency market, if at all. For now, it is important to conduct your own research, come to your own conclusions, and invest your money as you see fit.
***
Trakx is building a one-stop shop for Crypto Traded Indices. Discover more about our project on our website and social media channels, such as Telegram http://t.me/trakx_io.
No comments:
Post a Comment