Cryptocurrencies are actively getting more expensive amid falling financial markets around the world. According to information for March 2, the exchange rates of the main coins increased significantly. Bitcoin and its digital assets, which were in the greatest demand, we’re in the lead:
Bitcoin up 3.04% (to $ 8855)
Bitcoin Cash – 4.69% (up to $ 326.08)
Ethereum – 2.97% (up to $ 227.21)
Litecoin – by 2.43% (up to $ 60.33)
Ripple – 2.11% (up to $ 0.224)
Part of the capital migrated from the classical financial markets to cryptocurrency in an attempt to protect themselves from the failure of quotes.
It is not surprising that after the collapse of world stock exchanges, crypto interested investors as an asset that is more or less not connected with the real economy. In fact, during the crisis, stocks and bonds will experience serious problems associated with the real sector. While in the digital world, little will change, and this means that cryptocurrency can become an alternative version for investing in a period of such turbulence.
Last week, due to news about the expansion of the geography of coronavirus, quotes around the world, including in Europe, were actively falling. The pan-European Stoxx 600 index collapsed immediately by 12%. On the morning of March 2, there was hope for a recovery, but after lunch, European stock indices had already lost up to 5.4%, while futures for US stock indices fell 0.35-0.71%. Despite this, the price of gold has risen.
Gold is a classic safe-haven asset that always grows in value during financial instability in the world. Both last week and this week, its price increased by another 1.2% and reached $ 1603 per troy ounce.
Usually, at the peak of world crises, the Swiss franc is also active, but after the news of the penetration of COVID-19 into Switzerland, its national currency did not grow linearly. The authorities banned mass events and even canceled the Geneva Motor Show, which was supposed to open on March 5.
At the same time, the European Central Bank, like the US Federal Reserve, announced its readiness to support markets that could stop the collapse of quotations.
However, it is too early to associate such a local event as a new infection in China with the cryptocurrency market. The decline in activity in the Middle Kingdom, in any case, will affect the overall trading volume and liquidity. But most likely in the near future, we will be able to see a rather boring lateral dynamics with periodic surges in volatility.
Also for some investors, crypto is not only a defensive asset and a way to survive the impending recession, but also an option for extremely local and targeted investments and a potential source of profit in the future.
If investments in bitcoins, Ethereum, Ripple and other coins grow steadily, then this will continue not only at times of peak financial instability in the world.
According to information, bitcoin exceeded 10 thousand dollars for the first time since last October.
But still, there is no consensus among experts on how coronavirus will affect the exchange rate of bitcoins. However, even those experts who believe that this disease can affect the main digital coin explain that this will happen only if the outbreak develops into a full-fledged epidemic.