As the financial turmoil caused by the coronavirus pandemic continues its assault on the stock market, crypto has remained relatively stable over the past 24 hours.
Bitcoin, which was trading for about $6,900 on Monday, experienced a drop of roughly $200 on Tuesday and has remained in the $6,700 range. Ethereum is going for about $157, while Ripple’s XRP also hasn’t changed from Tuesday’s $0.18.
But while crypto is holding steady, the International Monetary Fund (IMF) is predicting the biggest recession in nearly a century. The IMF believes global growth could fall to minus 3% by the end of 2020. If you adhere to the “digital gold” Bitcoin narrative, then this could potentially bode well for the crypto market. However, the reality of the last month, as Bitcoin has remained closely correlated with traditional markets, would suggest otherwise.
In contrast to crypto’s relative stability today, the Dow Jones Industrial Average dropped more than 400 points since this morning. Businesses in the United States remain in dire straits as retail sales fell by nearly 9% last month.
Regional manufacturing activity in New York, which has been badly hurt by the coronavirus outbreak, fell by nearly 80%, while economists from JP Morgan are expecting a drop in GDP growth by as much as 40 percent in Q2.
Abroad, however, some economies are beginning to experience a recovery. In Germany, for example, Chancellor Angela Merkel announced a plan that will see several small businesses resume operations beginning April 20, while many schools are set to reopen on May 4. The hope is that it won’t be long before America catches up.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.